Bringing you live news and features since 2006 

Two fingers

iShares expands corporate bond range with two interest rate hedged ETFs

RELATED TOPICS​

iShares has launched the iShares $ Corporate Bond Interest Rate Hedged UCITS ETF and iShares £ Corporate Bond Interest Rate Hedged UCITS ETF on the London Stock Exchange.

 
The funds offer physically-backed exposure to corporate bonds whilst mitigating interest rate risk and will complement the extensive range of fixed income ETFs currently offered by iShares.
 
In low yield environments, many investors choose to seek extra income by investing in corporate bonds. These new funds are designed to cater for those investors who want to obtain additional yield, but are concerned about the impact of changes in government bond yields on bond prices, at a time when uncertainty around central bank monetary policy has seen volatility in yields increase. The funds aim to mitigate interest rate risk by selling government bond futures and targeting a duration of zero. 
 
Tom Fekete, head of product development for iShares in Europe, the Middle East and Africa says: “Investors remain interested in high quality corporate bonds as fundamentals are supportive and yields start to look more interesting. However, corporate bond investors take on the risk that the value of their bonds will fall as yields rise.
 
“The new funds aim to mitigate interest rate risk and enable investors to access the performance of corporate bonds in a single cost-efficient trade. We hope to expand this product suite further to give investors more choice in the way they manage interest rate risk and to meet the significant long-term demand for fixed income ETFs.”
 
The funds have a total expense ratio of 0.25 per cent and track the Markit iBoxx USD Liquid Investment Grade Index and the Markit iBoxx GBP Liquid Corporates Large Cap Index respectively. They follow the launch of the iShares Euro Corporate Bond Interest Rate Hedged UCITS ETF in October 2012, which has since grown to more EUR280m in assets.

Latest News

Morningstar has published a review of the European ETF market for the first quarter 2024, which finds that it gathered..
ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..
Calastone has published an ETF white paper which examines several of the processes that take place across the lifecycle of..
Adapting product lines to fit into changing methodologies and meet shifting demand is essential to remaining relevant in the industry..

Related Articles

Kristen Mierzwa, FTSE Russell
Index Investments Group (IIG), a division within index provider FTSE Russell, has extended its range of indices through two new...
ETFs
US ETF issuers of active ETFs are facing an increase in fees from the big custodian firms, such as Charles...
Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by