Bond ETFs: This unique investment offers a 5 percent payout and upside potential.

Bond ETFs: This unique investment offers a 5 percent payout and upside potential.

According to a report by www.boerse-online.de,

Bond ETFs are generally not a particularly exciting form of investment and often provide low returns. However, an outlier is the iShares Fallen Angels High Yield Corp Bond UCITS ETF, which offers a payout of five percent and additional upside potential. These bonds belong to companies that have been downgraded by rating agencies, which has led to a sharp fall in prices. Nevertheless, they offer attractive returns and price increase potential due to the higher risk of default.

The iShares ETF has delivered a total return of 55 percent since its launch in 2017, for an average annual return of 5.8 percent. It has also had lower volatility compared to other value ETFs, reducing risk for investors. This ETF is therefore particularly interesting for income-oriented investors who want to invest in bonds and also want to realize additional price potential.

The high payout and potential price growth make this unique ETF an attractive investment opportunity for investors looking for alternative sources of return. Particularly in times of low interest rates, it can make a valuable contribution to portfolio diversification and ensure an attractive overall return. However, investors should carefully consider the potential risks of such high yield bonds and the ETF compared to other investment options.