BlackRock has launched two new fixed income exchange-traded funds (ETFs) to improve investors' greater granularity into the US bond market, the asset manager has announced.
The launch comes hot-on-the-heels of BlackRock announcing that global bond ETFs had experienced the single best quarter on record with $44.5 billion inflows in the first quarter of 2017.
These new funds are part of BlackRock’s ambitions to meet investor demand for greater granularity when it comes to the US bond market.
The first of the two funds is the iShares $ Intermediate Credit Bond UCITS ETF (ICBU), which invests in a subset of US investment grade bonds, with maturity dates between one and 10 years.
It will provide exposure to a broad array of investment grade corporate, sovereign, supranational, local authority and non-US agency bonds.
Meanwhile, the iShares $ TIPS 0-5 UCITS ETF (TIP5) invests in short-term Treasury Inflation-Protected Securities and will seek to provide an inflation hedge with lower interest rate risk, while offering growth potential.
The bonds included in the underlying index have a duration ranging between zero and five years and are US dollar-denominated.
Commenting on the launches, Brett Olson, head of iShares fixed income EMEA at BlackRock, said: ‘We expect bond ETFs to become more ingrained as the tool investors – from funds buyers to bond buyers – look to form part, or in many cases the basis, of their bond allocations.’