BlackRock has launched two fixed income exchange traded funds (ETFs) as investors pour into global bond ETFs.
The iShares $ Intermediate Credit Bond Ucits (ICBU) and iShares $ TIPS 0-5 Ucits ETF (TIP5) ETFs are designed to provide investors with a greater granularity in US bond exposure.
The iShares $ Intermediate Credit Bond Ucits ETF (ICBU) invests in a subset of US investment grade bonds— with a maturity of between one and 10 years.
The iShares $ TIPS 0-5 Ucits ETF (TIP5) invests in short-term Treasury Inflation-Protected Securities—with the objective of providing an inflation hedge.
The total expense ratios (TER) for the funds are 0.10% for iShares $ TIPS 0-5 UCITS ETF and 0.15% for the iShares $ Intermediate Credit Bond UCITS ETF.
‘Our aim is to empower investors when investing in the bond markets, and more and more clients are coming to us with ideas for product launches,’ said Brett Olson, head of iShares fixed income.
‘This thirst for granularity is symptomatic of a broader shift among asset allocators towards “being active with passive” to meet their desired goals.
'We expect bond ETFs to become more engrained as the tool investors – from funds buyers to bond buyers – look to form part, or in many cases the basis, of their bond allocations.’
The global bond ETF industry achieved its best quarter on record with $44.5 billion (£34.4 billion) inflows in the first quarter of 2017.