BlackRock has expanded its range of fixed income ETFs with the launch of a floating rate bond fund, the company has announced.
The iShares $ Floating Rate Bond Ucits ETF will invest in US dollar-denominated floating rate bonds designed to protect investor portfolios against rising interest rates.
The fund has a total expense ratio of 0.10% and is set to be physically-replicating, meaning it will hold the underlying securities of the index.
Bonds held in the underlying index of the fund will be investment grade or higher and will have a maturity of five years or less.
Commenting on the launch, BlackRock’s head of iShares EMEA fixed income strategy, Brett Pybus said: ‘Concerns about rising rates have prompted many investors to consider moving out of longer-duration bonds, this fund provides investors with a way to reduce duration and protect portfolios against periods of rising interest rates.
‘The fund provides investors with exposure to short-dated, high-quality floating rate credit denominated in US dollars, and offers an attractive yield compared with money market funds.’
The firm also recently launched two new equity income Ucits ETFs, in order to complement BlackRock’s existing iShares Dividend range.