iShares iBonds 2029 Term High Yield and Income ETF (IBHI) seeks to provide exposure to a diversified portfolio of high-yield corporate bonds and income-generating securities that mature or are called by December 15, 2029. This defined-maturity bond ETF targets higher-yielding debt securities from below-investment-grade issuers.
How It Works
IBHI uses a buy-and-hold approach, purchasing a static portfolio of high-yield bonds, preferred securities, and other income instruments at inception with no ongoing rebalancing. The fund is designed to terminate on December 15, 2029, when remaining securities mature or are called, distributing final proceeds to shareholders. Holdings are selected based on credit quality, yield potential, and maturity alignment, with the portfolio becoming more concentrated over time as bonds mature.
Key Features
- Defined maturity date of December 15, 2029 eliminates reinvestment risk and provides predictable investment timeline
- High dividend yield of 5.71% from below-investment-grade corporate bonds and preferred securities
- Zero expense ratio reduces costs compared to traditional high-yield bond funds charging 0.50-1.00% annually
Risks
- This ETF can lose value if high-yield bond issuers default or are downgraded, potentially causing 10-20% declines during credit stress periods
- Rising interest rates reduce bond values, with longer-duration holdings potentially declining 5-15% for each 1% rate increase until maturity
- Credit spread widening during economic downturns can cause significant temporary losses even without actual defaults occurring
Who Should Own This
Best suited for income-focused investors with 7-year time horizons seeking predictable cash flows and willing to accept credit risk for higher yields. Medium-to-high risk tolerance required due to high-yield bond volatility. Works as satellite holding (5-15% of fixed income allocation) for investors approaching the 2029 target date.