BlackRock’s iShares has launched an exchange-traded fund (ETF), which the firm claims is the first of its kind to provide exposure to euro-denominated investment grade and
sub-investment grade corporate bonds.
The iShares Euro Corporate Bond BBB-BB Ucits ETF targets an average monthly credit rating of BBB-, by investing in euro corporate bonds that are rated BBB and BB.
In aiming to give exposure to the European corporate bond market, the fund’s index employs a market-value weighted methodology with each issuer accounting for no more than 5% of the index.
Tom Fekete, head of product development for iShares in Europe, the Middle East and Africa, says the fund is designed to capitalise on attractive risk-return opportunities that arise when investment grade bonds are downgraded or upgraded, leading to large price movements and trading volumes.
“The launch of the euro corporate bond fund is the first time investors will be able to access euro denominated investment grade and sub-investment grade corporate bonds through an ETF,” he says.
At December 31, 2014, BlackRock’s assets under management (AUM) were $4.65 trillion (€4.06 trillion), while iShares held 700 funds and more than $1 trillion in AUM.
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