BlackRock has launched a sub-investment grade corporate bond fund.
The iShares Euro Corporate Bond BB-B UCITS ETF provides diverse exposure to over 200 Euro-denominated bonds rated between BB+ and B-. The underlying index is market-value weighted with a single issuer accounting for a maximum of 5 per cent and a country cap of 20 per cent. The fund is physically replicating, meaning it buys the securities of the index, and has a total expense ratio of 0.5 per cent. It marks the 87th in the iShares European fixed income ETF range.
Brett Olson, Head of Fixed Income for iShares in EMEA, says: “Investors are diversifying their fixed income exposure as they look for ways to generate income amid historically low interest rates. This ETF provides access to high yield bonds, whilst removing the higher credit risk associated with bonds rated lower than B-.”
In 2015 fixed income ETFs generated USD30.2 billion in assets, of which iShares commanded the lion’s share. Globally, flows into fixed income ETFs reached a record high of USD93.5 billion.