Worst Performing: IShares Fallen Angels USD Bond ETF (FALN)  

Investigating Claims: IShares Fallen Angels USD Bond ETF (FALN) 

The White Law Group is investigating potential securities claims involving IShares Fallen Angels USD Bond ETF (FALN). IShares Fallen Angels USD Bond ETF (FALN)and other junk bond ETFs are taking a hit as interest rates rise. 

As you may know, the Federal Reserve raised interest rates by 0.5% on May 4, 2022 to 0.75% to 1.00%, and increased it again in September 2022 to 3% to 3.25%. More increases are anticipated in the months ahead.   

According to Morningstar, just one high-yield bond exchange-traded fund (ETF) offered a positive return this year through the end of the third quarter. The best performing high-yield ETFs tended to be shorter in duration, while some longer duration ETFs were among the worst performers, including IShares Fallen Angels USD Bond ETF (FALN).  

The iShares Fallen Angels USD Bond ETF seeks to track the investment results of an index composed of U.S. dollar-denominated, high yield corporate bonds that were previously rated investment grade.  

Unfortunately for bond fund investors, the longer the maturity of a particular bond or group of bonds, the greater impact changing interest rates will have.  According to Morningstar, IShares Fallen Angels USD Bond ETF (FALN) is currently down –20.82% YTD.  

FALN Investors may have Claims  

The White Law Group is investigating potential securities claims involving broker dealers who may have improperly recommended bond funds to investors.   

Before recommending a bond investment, a financial advisor, at minimum, is required to disclose: (1) the bond’s current price, (2) the commissions or markups that must be paid to acquire the bond, (3) an explanation of the call provisions for the bond (if applicable), (4) the current yield, the yield to maturity, and the yield to call the bond, (5) the amount and timing of the bond payments, and, most importantly, (6) the risk of default or devaluation of that particular bond’s value.   

If a financial advisor failed to disclose this potential risk of investing in bonds, and instead represented that investing in bonds is “safe,” then the investor may have a claim for failure to adequately disclose the true risks of investing in bonds at historically low yields.  This risk is magnified if the maturity of the bond is longer.  The longer the maturity of a particular bond or group of bonds, the greater impact changing interest rates will have.  So, if a financial advisor recommends to a client in a historically low yield environment, to over-concentrate their portfolio in long term bonds, the risk of loss is substantially greater than if the broker recommended short term bonds.  

If you have suffered investment losses in IShares Fallen Angels USD Bond ETF (FALN), the securities attorneys at the White Law Group may be able to help you by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.  

For a free consultation with one of our securities fraud attorneys please call The White Law Group at 888-637-5510.  

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington. For more information on The White Law Group, and its representation of investors, please visit www.WhiteSecuritiesLaw.com.