Bringing you live news and features since 2006 


iShares launches EMEA’s first passive ultrashort bond ETFs


iShares has isted three passive ultrashort bond ETFs that are the first of their kind in Europe, the Middle East and Africa (EMEA) as well as two short duration bond ETFs, on the London Stock Exchange.

The launches come in response to investor demand for products that can help mitigate the risk posed by potential rising developed market interest rates, as well as for exposures that can provide better returns than cash.
The iShares Euro Ultrashort Bond UCITS ETF, iShares $ Ultrashort Bond UCITS ETF and iShares £ Ultrashort Bond UCITS ETF are the first passive ETFs of their kind in EMEA and will be based on the recently launched Markit iBoxx Liquid Ultrashort indices. They invest primarily in fixed and floating rate investment grade corporate bonds denominated in euros, US dollars and sterling respectively, with the fixed rate bonds maturing between zero and one year and floating rate bonds between zero and three years.
The iShares $ Short Duration Corporate Bond UCITS ETF and iShares $ Short Duration High Yield Corporate Bond UCITS ETF invest in investment grade and sub-investment grade US dollar denominated corporate bonds respectively. To be included in the funds, the bonds must be five years or fewer from maturity, resulting in a typical fund duration of between two and three years.
All five ETFs are physically replicating optimised funds, purchasing and holding the underlying bonds. The total expense ratio for the ultrashort bond ETFs is 0.2% and ranges between 0.2% and 0.45% for the short duration products.
Tom Fekete, Head of Product Development for iShares in EMEA, says: “Today’s market conditions have created significant demand for short and ultrashort duration strategies. Developed economies are on the long path of slow and steady growth, and it is widely anticipated that the low interest rates of recent years will eventually start to climb.
“Long dated bonds are particularly impacted by rising interest rates, and fixed income investors are derisking by shifting their emphasis towards shorter duration bonds that are less exposed to changes in these rates. At the same time, investors who have been on the sidelines of the market are looking for ways to increase their returns, and short duration bonds can offer greater yield than some cash investments for those looking to put their cash to work.
“Short and ultrashort duration bond ETFs provide instant and diversified exposure to bonds that are closer to maturity in a single, transparent and cost-efficient trade. These new funds, combined with our existing interest rate hedged ETFs, give investors a variety of new options to invest in fixed income as we enter a new stage in the global economic recovery.”

Latest News

Saving and investing app, Moneybox, has doubled the number of ETFs available on the platform, in the light of ‘growing..
Global X ETFs has announced the appointment of Ryan O'Connor as its Chief Executive Officer effective as of April 8, 2024. ..
Value-driven structured credit investing firm, Angel Oak Capital Advisors, LLC, has announced the completed conversions of two of its mutual..
Confidence in the continuing strength of bitcoin and Ethereum is driving wider interest in altcoins and other digital assets, according..

Related Articles

Graham MacKenzie, Toronto Stock Exchange
The evolution of ETFs has been a multi-decade experience for Toronto Stock Exchange says Graham MacKenzie, managing director, Exchange Traded...
Frank Koudelka, State Street Global Services
ETF data provider and ETF Express data partner, Trackinsight, has published its Global ETF Survey 2024 Report: ‘50+ Charts on...
Matteo Greco, Research Analyst at Fineqia International writes that bitcoin (BTC) ended the week at approximately USD52,150, showing a notable...
US Distribution Awards trophies
The winners of the first US ETF Distribution Awards at the Exchange conference, hosted by ETF Express and sponsored by...
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