BlackRock has launched a global aggregate bond ETF, offering investors access to the Bloomberg Barclays Global Aggregate Index, one of the most popular fixed income indices.
The iShares Global Aggregate Bond UCITS ETF (AGGG) is a way to achieve diversified exposure to investment grade bonds, spread across currency, region and sector. The fund is physically-replicating, meaning it holds the underlying bonds of the index, and has a total expense ratio of 0.10 per cent. The fund launches with currency-hedged share classes, including US Dollar (AGGU), Sterling (AGBP) and Euro (AGGH).
The Bloomberg Barclays Global Aggregate Index is a measure of global investment grade debt from 24 local currency markets that is one of the most widely followed fixed income indices. The index provides exposure to treasuries, government-related, corporate and securitised fixed-rate bonds from both developed and emerging markets companies.
Brett Olson, head of iShares Fixed Income EMEA, says: “Investors are increasingly diversifying their bond allocation to protect their portfolios from potential sudden market moves. This ETF provides access to broad fixed income exposure meaning investors can avoid the time and resource-consuming task of picking out individual bonds.
“As the broader fixed income market continues to evolve, investors are increasingly seeking the diversification and flexibility that ETFs can offer, and using them alongside traditional security selection. Our 84-strong UCITS bond ETF range provides investors with fixed income building blocks that can act as ballast against equity market risk, while pursuing a consistent income.”
A recent survey by KPMG found that 60 per cent of the wealth managers and advisers polled used fixed income products in portfolio construction. To date, USD142 billion has been globally deployed into bond ETFs, as investors increasingly look beyond equities and use index products to gain exposure to other asset classes, the firm writes.