Europe’s first emerging market bond fund is one of two new exchange-traded funds to be launched on the London Stock Exchange on February 18 by iShares, the ETF management arm of Barclays G
Europe’s first emerging market bond fund is one of two new exchange-traded funds to be launched on the London Stock Exchange on February 18 by iShares, the ETF management arm of Barclays Global Investors.
The iShares JPMorgan USD Emerging Markets Bond fund and iShares S&P Emerging Markets Infrastructure fund take the total number of iShares ETFs listed in London to 59, and the number of iShares ETFs available throughout Europe to 139.
The iShares JPMorgan USD Emerging Markets Bond fund offers investors access for the first time in ETF form to US dollar-denominated sovereign and quasi-sovereign bonds issued by emerging market countries. The fund is also the first ETF to be based on an emerging markets bond index produced by JPMorgan, a leading broker in emerging market debt.
The iShares S&P Emerging Markets Infrastructure fund provides investors with liquid exposure to 30 of the largest publicly-listed emerging market companies in the global infrastructure industry, focusing on transportation infrastructure (20 per cent), energy infrastructure (40 per cent) and utilities (40 per cent). It is the fifth iShares fund based on the S&P Global Thematic series of indices.
‘The continued strong economic fundamentals in emerging market countries remains a source of real potential returns for investors, and these two new products further strengthen iShares comprehensive exposure to leading emerging market indices,’ says Frank Henze, head of product development at iShares Europe.
‘The iShares JPMorgan USD Emerging Markets Bond fund allows investors to take advantage of attractive yields and improving credit quality in emerging markets. Emerging market bonds also offer attractive risk-adjusted returns in comparison with developed market bonds, and with a low correlation to other asset classes, they offer investors an excellent tool for portfolio diversification.’
Regarding the iShares S&P Emerging Markets Infrastructure fund, Henze says: ‘There are four key developments that encourage governments in emerging markets to invest substantially in large scale infrastructure projects; population growth, economic growth, urban migration and inflation concerns, characteristics that are all apparent in large emerging market economies such as China and Russia.
‘The spending on infrastructure in emerging markets between 2007 and 2009 is forecast to exceed USD1trn, and the phenomenal growth and large current account surpluses in emerging markets make it possible for countries to upgrade and invest in their local infrastructure.
‘The iShares S&P Emerging Markets Infrastructure fund gives investors the opportunity to take advantage of this trend of placing increased emphasis and spending on infrastructure – in a transparent and highly liquid way.’
BGI is the world’s largest asset manager of structured investment strategies such as risk-controlled active strategies and indexing, with more than 190 iShares ETFs worldwide.