iShares launches iShares Barclays Euro Corporate Bond Financials UCITS ETF
iShares has expanded its European corporate bond suite with a new bond ETF focused on financial issuers.
The iShares Barclays Euro Corporate Bond Financials UCITS ETF complements iShares’ existing European corporate bond ETF suite and provides a way for investors to take a more targeted approach in their fixed income allocation.
Launched on the London Stock Exchange today, the iShares Barclays Euro Corporate Bond Financials UCITS ETF provides exposure to fixed rate, investment grade bonds that are denominated in euros and issued by financial companies. The fund tracks the Barclays Euro-Aggregate : Financial Index by holding the physical bonds. It is managed using a sampling technique, providing investors with efficient and liquid exposure to the performance of the underlying index. The fund has a total expense ratio of 0.20%. Barclays uses both issue and issuer ratings by three agencies – Moody’s Investors Service, Standard & Poor’s Ratings Group and Fitch Ratings – to determine the investment grade rating necessary for a bond to be included in the index.
“European financials is the largest sector of the European investment grade universe, representing 47% of the Barclays Euro-Aggregate: Corporates Index as of the end of April 2013,” the firm said.
This new fund provides targeted and diversified exposure to this segment of the European investment grade corporate bond market in one simple trade, coupled with a potential yield pick-up beyond that achievable through an aggregated Euro corporate bond exposure. The Barclays Euro-Aggregate : Financial Index offers a yield of 2.06% versus a 1.94% yield from the Barclays Euro-Aggregate: Corporates Index.
With the new launch, iShares now offers 17 corporate bond ETFs, including the iShares Barclays Euro Corporate Bond 1-5 ETF, iShares Barclays Euro Corporate Bond ex-Financials 1-5 ETF and iShares Barclays Euro Corporate Bond Interest Rate Hedged ETF.