Two ETF providers have added to the supply of fixed income ETFs. UBS Asset Management (UBS AM) has launched an emerging markets bond product – while in a separate move BlackRock is offering a global bond product.
UBS AM’s product, which is called the UBS ETF (LU) JP Morgan USD EM Diversified Bond 1-5 Ucits ETF – focuses on short-term emerging market bonds and aims to deliver a higher yield relative to developed market fixed income exposures.
The ETF, which tracks the JP Morgan USD Emerging Markets Diversified 3% Capped 1-5 Year Bond Index, gives investors access to emerging market sovereign bonds, quasi-sovereigns and corporate bonds with remaining maturity of between one and five years.
The bonds contained in the index are exclusively denominated in US dollars. It includes both fixed and floating rate securities, and country weights are capped at 3% to reduce single-country concentration.
BlackRock, meanhwhile, has launched a global aggregate bond ETF, providing diversified exposure to investment grade bonds spread across currency, region and sector.
The iShares Global Aggregate Bond Ucits ETF tracks the Bloomberg Barclays Global Aggregate Index, which holds global investment grade debt from 24 local currency markets. The index provides exposure to treasuries, government-related, corporate and securitised fixed-rate bonds from both developed and emerging markets companies.
Brett Olson, head of iShares fixed income Europe, Middle East and Africa, said that investors were increasingly diversifying their bond allocation to protect their portfolios from potential sudden market moves.
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