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BlackRock launches four new government bond iShares iBonds UCITS ETFs

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BlackRock has launched a further four iShares iBonds ETFs based on government bonds exposures, extending the iShares range of fixed maturity UCITS ETFs to 13 funds, now with maturities ranging from 2025 to 2029.

The firm writes that this launch is the first time BlackRock is offering iShares iBonds exposed to European government debt.

iBonds are ETFs that behave similarly to bonds and mature on a defined date, the firm explains. The funds hold a diversified set of bonds with similar maturity dates. After a fixed period, the ETFs will mature and return a final pay out to investors. The funds provide cost effective access to the bond market, with the diversification, transparency, and liquidity benefits of ETFs.

This launch provides additional maturities in US government debt to the iBonds range, December 2027 and 2029. Furthermore, the firm writes that this launch broadens options for investors by offering access to Italian government debt across 2026 and 2028 maturities. Italian government bonds currently yield the highest amongst Eurozone bonds. The new funds provide investors flexibility across currencies, maturities, and countries, the firm says.

iBonds ETFs can be used by investors to complement existing investment vehicles, in an easily understood structure, which aims to achieve a return through a combination of capital growth and the income on the fund’s assets which is derived from the underlying

bonds’ coupon payments. The ETF suite can also be used to add scale to bond portfolios offered by investment advisors and enhance operational simplicity. Each iBonds ETF holds a diversified basket of bonds, and can replace a large number of holdings, minimising the need to source and manage individual bonds. iBonds are available through wealth management platforms, including digital, and brokerages across Europe, the firm says.

Investors can also use these UCITS iBonds to build scalable, diversified bond ladders. By buying bonds with differing maturity dates, investors can stagger final payouts, and reinvest into funds with subsequent consecutive maturities – creating bond ladders. The unique structure of iBonds ETFs makes it easier to create these bond ladders with only a few ETFs, rather than trading numerous bonds. Investors can use them to structure their investments to meet shorter term goals and capture defined yields over set investment periods.

BlackRock writes that it has an over 13-year proven track record in managing iBonds and fixed maturity ETFs, having launched 86 iBonds ETFs. In EMEA, the firm writes that the iBonds UCITS ETFs had an accelerated and well received launch with over USD3 billion raised since August 2023 across 9 products with various maturities.

“iBonds ETFs are designed to mature like a bond, trade like a stock and diversify like a fund, all in a cost-efficient and transparent ETF wrapper. As the pool of iBonds UCITS ETFs grows, investors will be able to enjoy additional versatility, enabling them to curate portfolios to meet their needs,’ says Brett Pybus, Global Co-Head of iShares Fixed Income ETFs at BlackRock.

“Building on the success of Treasury iBonds in the US, these new iBonds ETFs provide additional choice and expand access for Europeans to the income provided by both US and Italian government bonds.”

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