BlackRock has launched iBonds ETFs, the first suite of fixed-maturity Ucits ETFs in Europe.
The four iBonds ETFs provide exposure to investment grade (IG) corporate bonds across various countries and sectors in each ETF, said BlackRock. Additionally, the ETFs offer two defined maturity dates in December 2026 and 2028, giving investors flexibility across currencies, maturities and countries, noted the asset manager.
iBonds are ETFs likened to bonds and mature on a defined date and hold a diversified set of bonds with similar maturity dates. iBonds ETFs can complement savings accounts to achieve a return through capital growth and the income on the fund’s assets derived from the underlying bonds’ coupon payments.
The ETF suite can add scale to bond portfolios offered by investment advisors and enhance operational simplicity, noted BlackRock. Each iBonds ETF holds a diversified basket of bonds and can replace various holdings.
“The fixed maturity nature of iBonds ETFs aims to offer investors clarity into their yield expectations and investment horizon. Bond ETFs are increasingly being used as an alternative to picking individual bonds, which can be costly for investors,” said Brett Pybus, global co-head of iShares fixed income ETFs at BlackRock.
BlackRock launched the first iBonds ETF in the US in 2010. Demand for iBonds ETFs has grown recently, attracting inflows of $8.1 billion over 2022 and $5.2 billion over 2023, per the end of July. BlackRock is now bringing this innovation to Europe via a Ucits ETF wrapper.
Fixed income Ucits ETFs in Europe have achieved $28.2 billion of inflows as of the end of July.
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