BlackRock Expands Investment Grade Credit Options with Eight New ETFs across Eurozone
BlackRock Expands iBonds Range with Eight Investment Grade Credit ETFs
The financial landscape is witnessing a significant shift with the introduction of eight new investment grade (IG) credit ETFs by BlackRock, a leading global investment management corporation. This expansion marks an important milestone in the growth and diversification of BlackRock’s fixed maturity iBonds range.
As part of this expansion, the firm has launched eight additional products that provide exposures to IG credit spread across various geographies and sectors. Specifically, these new additions include:
- iShares iBonds Dec 2031 Term $ Corp UCITS ETF (31ID)
- iShares iBonds Dec 2032 Term $ Corp UCITS ETF (32ID)
- iShares iBonds Dec 2033 Term $ Corp UCITS ETF (33ID)
- iShares iBonds Dec 204 Term $ Corp UCITS ETF (34ID)
- iShares iBonds Dec 2031 Term € Corp UCITS ETF (31IG)
- iShares iBonds Dec 2032 Term € Corp UCITS ETF (32XG)
- iShares iBonds Dec 2033 Term € Corp UCITS ETF (33GI)
- iShares iBonds Dec 2034 Term € Corp UCITS ETF (34GI)
In a bid to ensure the widespread adoption of these new products, BlackRock has listed the U.S. dollar-denominated ETFs on Euronext Amsterdam and those denoted in euros on Deutsche Boerse. Notably, all of these newly introduced products carry a total expense ratio (TER) of 0.12%.
Diversified Range Strengthens Offering
As at the end of October, BlackRock’s Europe-domiciled iBonds range had garnered year-to-date inflows totaling $4.2 billion, which accounted for roughly 8% of all fixed income UCITS ETF flows according to BlackRock figures.
The launch of these eight new products brings the total count of the Europe-domiciled iBonds array to twenty-five, with twenty out of this number providing exposure to IG investment grade credit. According to Brett Pybus, global co-head of iShares fixed income ETFs at BlackRock, "As the range of iBonds UCITS ETFs grows, investors will be able to benefit from additional versatility to meet specific portfolio needs and expanding use cases such as bond laddering."
Moreover, these new iBonds ETFs offer further optionality for clients aiming to lock in yields targeted towards a specific point on the curve along with the operational efficiency and convenience of the ETF wrapper. As stated by Brett Pybus, the co-head, "These new iBonds ETFs provide additional choice to clients who aim to lock in yields targeting a specific point on the curve coupled with the operational efficiency and convenience of the ETF wrapper," he added.
Fixed Maturity ETFs – Providing Regular Interest Payments
Fixed maturity ETFs hold an array of bonds with diverse characteristics such as similar maturity dates. These vehicles facilitate regular interest payments over the fund’s life, culminating in a final payout during its stated maturity year.
The new iBonds products closely track a family of indices constructed by Bloomberg Indices and MSCI providing exposure to IG credits for both specified maturity dates and currencies. The introduction of these eight new products reflects a growing inclination among investors towards seeking tailored investment solutions aligned with their unique needs.
Background on iShares Fixed Income ETFs
In April, BlackRock introduced fixed maturity ETFs delivering exposure to U.S. and Italian government bonds.
This significant expansion of the range of fixed maturity iBonds from BlackRock is set to enhance investor options in a rapidly evolving market scenario.
