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iShares extends its fixed income ETF offering with two new funds


iShares, the Exchange Traded Funds (ETF) platform of BlackRock has launched two US fixed income ETFs ,which leverage the local portfolio management and trading expertise of its US team.

The iShares Markit iBoxx $ High Yield Capped Bond fund is a UCITS compliant Dublin domiciled, physically-based ETF, listed on the London Stock Exchange. It tracks the performance of the Markit iBoxx USD Liquid High Yield Capped index. This index comprises over 400 of the World’s most liquid USD-denominated sub-investment grade corporate bonds. The index constituents are capped with a maximum individual issuer weighting of 3% ensuring diversification across the US high yield market.
The iShares Barclays Capital US Aggregate Bond fund is a UCITS compliant ETF, listed on the London Stock Exchange. It provides broad based exposure to the US dollar denominated investment grade fixed income market. The ETF is physically-based, investing directly in underlying government, government-related, securitised and corporate bonds. This fund complements the iShares Barclays Capital Euro Aggregate Bond ETF, offering core fixed income building blocks for flexible asset allocation.
iShares has exported the portfolio management and trading of both funds to its US teams, in order to leverage their specialist local knowledge and expertise.
Commenting, Axel Lomholt, Head of ETF Products, iShares EMEA, says: “We’ve launched these ETFs in response to demand for liquid and transparent fixed income exposures that are easy to buy and trade. Investors this year have also shown a clear preference for physically-based products and for investing through regulated fund vehicles. Based on well-regarded industry benchmarks, and drawing on BlackRock’s global expertise in fixed income portfolio management and trading, we believe these new products are innovative and best-in-class ETFs.
“The funds also represent the ongoing expansion of our fixed income range, and complement existing iShares ETFs to provide investors with a choice of building blocks when they are constructing portfolios and allocating to the asset class. Our existing US domiciled ETF based on the Markit iBoxx $ High Yield Corporate Bond index has gathered over USD8bn in assets since its launch in 2007, and we anticipate this type of exposure will prove similarly popular amongst European investors.”

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