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.

The iShares High Yield Corporate Bond Buywrite Strategy ETF writes covered calls on the HYG ETF to generate high distributions. The fund's strategy results in capped upside and uncapped downside, causing it to underperform the underlying HYG ETF over the long term. Given the monthly rolling of HYGW's covered calls and current low credit spreads, HYGW is likely to see capital losses as the economy weakens in the coming years.

HYGW: Avoid This Amortizing ETF

HYGW offers a strong 13.3% distribution yield by investing in high-yield corporate bonds and writing covered calls. The fund's strategy works best when high-yield rates are flat or increasing, worst when these decrease. At current rates and spreads, I do not foresee any significant decrease in high-yield rates moving forward.

HYGW: Covered Call High-Yield Bond ETF, Outstanding 13.3% Yield, Declining Share Price And Distributions

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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

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