Thus, the SLXX ETF is not a "true" corporate bond fund, a point that I raised with iShares in 2009. The company responded with a new ETF, the iShares Sterling Corporate Bond ex-Financials (ISXF) . This ETF uses the same base index (Markit iBoxx Sterling Liquid Corporate Long-Dated Bond), but strips out the financial component.

The resulting fund has had slightly less pick-up from investors with only 300 million AUM at the time of writing. However, it has been a solid performer. The ex-financial ISXF has put in strong gains over the year, up some 8 points from Januarys level of 102.6. Compare this to the broader SLXX, which has performed only adequately, up 3 point from 115 (see overlay chart, below).

It is also evident that the financial component of the SLXX has made for a much bumpier ride. Volatility here has been significant with regular ups-and-downs of 4-5%. This is slightly sub-optimal; to a certain extent, investors buy bond funds to avoid the sort of valuation fluctuations seen in the equity market.

Eoin Treacy's view The iShares Sterling Bond (ex-Financials) ETF remains in a consistent uptrend and has an indicated yield of 4.37%. A number of its constituents have solid track records of increasing their dividends suggesting strong cash flows. The ETF has a similar pattern to a number of the Autonomies highlighted earlier this month.