What happens if one of the bonds within the index fails?
This is determined by the Markit iBoxx Sterling Liquid Corporate long-Dated Bond Index methodology. The index has an investment grade only criteria. If a bond gets downgraded to below investment grade, it will be deleted from the index at the next month end, in the course of an extraordinary index rebalancing. For a full explanation of this process please refer to the index methodology. A default from an underlying bond within the fund, as with any fixed income product, would potentially have a negative impact on the capital value and coupon received. However, the iShares £ Corporate Bond provides a benefit of diversification across 40 issuers within the index, which diversifies from single or concentrated issuer risk.
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