iShares launches Global Corporate Bond ETF
iShares, the exchange traded funds platform of BlackRock, has launched the first ETF in Europe which offers investors diversified exposure to global corporate bonds, iShares Global Corporate Bond ETF.
The new fund aims to track the Barclays Global Aggregate Corporate Bond Index, a broad-based measure of global investment-grade fixed-rate corporate debt markets, by trading across more than 7,000 high quality corporate bonds mainly from US (48%), Europe (23%) and Asia Pacific (10%) and across 15 currencies.
Rather than holding all bonds simultaneously, it will be sampled, with around 270 bonds at launch increasing to a typical holding of around 500 bonds.
“The ETF arrives at a time when demand for fixed income assets is soaring. Flows into fixed income ETFs have almost doubled in 2012, with $50.8bn of net new assets recorded in the first eight months compared with $28.5bn in the same period in 2011,” BlackRock said.
The fund is physically-backed, holding the underlying bonds and securities, and has a total expense ratio of 0.2%. On top of potential capital gains, the fund pays a dividend to investors twice a year.
“With clients continuing to search far and wide for yield in their portfolios, it means that more and more they need to consider allocating to global credit. This new ETF gives investors unparalleled access to the global corporate bond market in a single investment,” said Alex Claringbull, senior fixed income portfolio manager for BlackRock’s iShares fixed income range.