BlackRock unveils iShares Global Corporate Bond ETF (CORP)

Sep 25th, 2012 | By | Category: Fixed Income

BlackRock has announced the launch of the iShares Global Corporate Bond ETF (CORP), a physically-backed exchange-traded fund (ETF) providing investors with diversified exposure to global corporate bonds.

BlackRock unveils iShares Global Corporate Bond ETF (CORP)

The London-listed iShares Global Corporate Bond ETF (CORP) has access to more than 7,000 high-quality corporate bonds from around the globe and across 15 currencies.

Listed on the London Stock Exchange and aimed at UK and European investors, the fund arrives at a time when demand for fixed income assets is soaring. [See Fixed income ETF assets to surge, as iShares, Vanguard, Pimco and SSgA battle it out].

Flows into fixed income ETFs have almost doubled in 2012, with $50.8 billion of net new assets recorded in the first eight months compared with $28.5 billion in the same period in 2011, according to BlackRock’s ETP Landscape research.

The new fund aims to track the Barclays Global Aggregate Corporate Bond Index, a broad-based measure of global investment-grade fixed-rate corporate debt markets, by trading across more than 7,000 high-quality corporate bonds mainly from US (48%), Europe (23%) and Asia Pacific (10%), and across 15 currencies.

Rather than holding all bonds simultaneously at their respective benchmark weights, the fund will employ a sample-based approach, with around 270 bonds at launch increasing to a typical holding of around 500 bonds. This optimised approach is deemed more cost effective and efficient than full index replication.

At launch, the top five holdings appear to be JPMorgan Chase & Co, Goldman Sachs, General Electric Capital, Morgan Stanley and HSBC Holdings. On a sector basis, the largest contributors are industrials, financials and utilities. Overall, the portfolio has an average maturity of 7.62 years, a modified duration of 5.73 and yield to maturity of 2.70%.

Alex Claringbull, senior fixed income portfolio manager for BlackRock’s iShares fixed income range said: “With clients continuing to search far and wide for yield in their portfolios, it means that more and more they need to consider allocating to global credit. This new ETF gives investors unparalleled access to the global corporate bond market in a single investment. The fund continues the expansion of our unrivalled range of corporate bond funds available and as a first in Europe, further reinforces our commitment to providing solutions to investors.”

The fund has a total expense ratio (TER) of 20 basis points, or 0.20%, and will pay a dividend to investors twice a year, on top of potential capital gains. Fully UCITS compliant, the fund has UK Reporting Status and is eligible for ISAs and SIPPs.

The launch of CORP adds to iShares’ existing suite of London-listed corporate bond ETFs, which includes:

iShares Barclays Capital Euro Corporate Bond ETF (IEAC)
iShares Barclays Capital Euro Corporate Bond 1-5 ETF (SE15)
iShares Barclays Capital Euro Corporate Bond ex-Financials ETF (EEXF)
iShares Barclays Capital Euro Corporate Bond ex-Financials 1-5 ETF (EEX5)
iShares Markit iBoxx Euro Corporate Bond ETF (IBCX)
iShares Markit iBoxx $ Corporate Bond ETF (LQDE)
iShares Markit iBoxx £ Corporate Bond ETF (SLXX)
iShares Markit iBoxx £ Corporate Bond 1-5 ETF (IS15)
iShares Markit iBoxx £ Corporate Bond ex-Financials ETF (ISXF)
iShares Morningstar $ Emerging Markets Corporate Bond ETF (EMCP)

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