iShares High Yld Crp Bd Buywrt Stgy ETF earns a Morningstar Medalist Rating of Negative with strength in areas such as People offset by weaker spots such as Process. The portfolio maintains a cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The strategy merits a Below Average Process Pillar rating. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People, Process and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

The relative illiquidity of U.S. high-yield bonds makes indexing a difficult endeavor. This strategy focuses on the most liquid portion of this investment opportunity set to address this challenge. The strategy’s rigidity can be a disadvantage in the high-yield market, as it omits portions of the opportunity set that its active peers can scour for opportunities. The fund earns a Below Average Process rating.

Note: The Process Pillar rating and analysis are indirectly assigned by an analyst. When an analyst covers a vehicle that follows a given strategy (as codified by Morningstar’s StrategyID data point) Morningstar maps the covered vehicle’s Process Pillar to any other uncovered vehicles that follow the same strategy (that is, share the same StrategyID). This ensures that the analyst’s view is leveraged whenever available and promotes consistency when assigning Process Pillar ratings to vehicles that follow the same strategy.

Below Average

Process

BlackRock boasts a large and experienced team reinforced by sector specialists, support teams, and centralized trading desks, mitigating key-person risk and underpinning an Above Average People rating. 

James Mauro and Karen Uyehara have been named as lead portfolio managers on this fund since 2011 and 2021, respectively. Mauro joined BlackRock in 2010 from State Street, while Uyehara joined the same year from Western Asset. Uyehara replaced Scott Radell as a lead portfolio manager in June 2021. The change does not affect the team’s processes nor our confidence in its abilities going forward. 

Portfolio management is a team effort at BlackRock, so the named manager interacts with a wider team of traders and managers around the globe to execute the fund’s day-to-day operations. A separate index analytics team researches and helps prepare for corporate actions and index changes. Most of the portfolio management process is automated as BlackRock’s Aladdin platform fulfills much of the portfolio management tasks. Portfolio managers primarily review and approve trades prior to and after execution, utilizing discretion when there’s opportunity for added value. An independent risk management team supervises index-tracking performance.

Note: The People Pillar rating and analysis are indirectly assigned by an analyst. When an analyst covers a vehicle that follows a given strategy (as codified by Morningstar’s StrategyID data point), Morningstar maps the covered vehicle’s People Pillar ratings to any other uncovered vehicles that follow the same strategy (that is, share the same StrategyID). This ensures that the analyst’s view is leveraged whenever available and promotes consistency when assigning People Pillar ratings to vehicles that follow the same strategy.

Above Average

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

Ishares High Yield Corporate Bond Buywrite Strategy ETF

HYGW uses a fund-of-fund approach to passively track an index that measures the performance of holding shares of the iShares High Yield Corporate Bond ETF and writing one-month call options against the shares.

iShares Core U.S. Aggregate Bond ETF

iShares iBoxx High Yield Corporate Bond ETF

iShares Ibonds Dec 2032 Term Corporate ETF

iShares Core S&P 500 ETF

Ishares Investment Grade Corporate Bond Buywrite Strategy ETF

iShares MSCI USA Quality Factor ETF

iShares 20+ Year Treasury Bond ETF

iShares 20+ Year Treasury Bond BuyWrite Strategy ETF

The U.S. ETF industry continues to evolve. In the first 10 months of 2023, fixed income ETFs gathered more than 40% share of the net inflows, despite representing just 20% share of the market.

Recapping BlackRock's Strong Fixed Income Flows

BlackRock's iShares High Yield Corporate Bond BuyWrite Strategy ETF offers a super-high yield. However, there are several downsides to the ETF that income investors ought to consider.

Should You Buy This ETF With a Jaw-Dropping 16% Yield?

HYGW invests in high-yield corporate bonds and sells covered calls. Doing so leads to a massive 16.7% yield, but long-term capital losses and distribution cuts. An overview of the fund follows.

HYGW: High-Yield Bond Covered Call ETF, Strong 16.7% Yield

iShares High Yield Corporate Bond Buywrite Strategy ETF is one of a trio of BlackRock fixed-income buy-write or covered call ETFs. The fund holds a position in the iShares iBoxx $ High Yield Corporate Bond ETF and sells monthly at-the-money call options on it. Getting to grips with the fund's yield takes a bit of work, but, overall, it could easily improve on the 8.6% yield of its underlying holding.

HYGW: This Buy-Write Bond Fund Could Deliver Sustainable Double-Digit Yields

Covered call funds are becoming very popular for income-seeking investors. These funds are not limited to stocks.

HYGW: High Yield Bonds Meet Covered Calls For A 15% Yield

BlackRock recently launched three BuyWrite fixed income ETFs. These provide investors with strong, double-digit dividend yields, but should see lower share prices and capital losses long-term.

HYGW: Double-Digit Forward Yields, Long-Term Capital Depletion

On August 22, BlackRock Inc (NYSE: BLK) unveiled three new fixed income exchange traded funds, offering investors a BuyWrite strategy on fixed income assets.

BlackRock Announces 3 New BuyWrite Fixed Income ETFs For The Savvy Investor

NEW YORK--(BUSINESS WIRE)--BlackRock today launched a first-of-its-kind suite of fixed income ETFs that provide access to buy-write investment strategies on baskets of fixed income securities: the iShares 20+ Year Treasury Bond BuyWrite Strategy ETF (Cboe: TLTW), iShares High Yield Corporate Bond BuyWrite Strategy ETF (Cboe: HYGW) and the iShares Investment Grade Corporate Bond BuyWrite Strategy ETF (Cboe: LQDW). Each ETF packages two potential income sources into one ticker – premiums generate

News for Ishares High Yield Corporate Bond Buywrite Strategy ETF ETF (HYGW)