iShares launches first euro high-yield bond ETF

*Fund gives exposure to almost 100 corporate bonds

*Intended to improve access to market

LONDON, Sept 6 (Reuters) - iShares, the exchange-traded funds (ETF) operator owned by BlackRock (BLK.N), said on Monday it had launched a fund that will provide investors with easier access to the European high-yield bond market.

The fund, the first of its kind in the world, addresses some of the liquidity issues in a market that has traditionally been hard to access, said BlackRock fixed-income strategist Blanca Koenig.

It will offer exposure to nearly 100 of the most liquid sub- investment-grade corporate bonds.

Flows into high-yield bond funds based in Europe have been strong over the year to end-June, with net sales at 20 billion pounds ($30.7 billion) for the sector as whole, dominated by U.S. and global high-yield products, according to data from Lipper FMI.

Net sales of European and UK high-yield funds were about 5 billion pounds in the same period. Global high-yield inflows accounted for 16 percent of all sales of fixed-income funds in the year to June, Lipper added.

ETFs are baskets of assets, such as stocks, bonds or commodities, that trade on stock exchanges, but have only existed in Europe for about 10 years. They were first launched in Canada in 1990 before arriving in the United States.

Unlike traditional mutual funds, ETFs can be bought and sold throughout the day like stocks and are also attractive to investors because they have lower fees and tax advantages compared with mutual funds.

iShares has teamed up with Markit, which owns and manages the iBoxx Euro High Yield index of which two-thirds of constituent bonds are rated BB and just 5 percent at the more riskier CCC rating.

Koenig said the index complements BlackRock's existing range of physically backed fixed-income ETFs.

Money manager BlackRock acquired asset manager Barclays Global Investors last December for about $14 billion, mainly for the iShares business [ID:nL633576].

BlackRock said in July that the iShares deal had enabled it to attract new client money, with around half of the $28.4 billion of inflows in the second quarter coming from iShares investors [ID:nN21270365].

JP Morgan Asset Management said high-yield bonds, along with high-dividend equities and convertible bonds, could continue to offer good yields while government bond yields hit record lows.

"High yield debt, in particular, is offering attractive spreads in comparison to government bonds," said Dan Morris, market strategist at J.P. Morgan AM.

Spreads on high-yield bonds are currently around 707 basis points over government bonds, compared with 269 basis points for emerging markets and 179 basis points for investment-grade bonds, JP Morgan added.

"With corporate balance sheets looking robust, and cash generation strong, companies should have little difficulty in meeting debt repayments," Morris said.

($1=.6511 Pound)

(Additional reporting by Joel Dimmock; Editing by Erica Billingham)