iShares expands range of corporate credit quality bond ETFs

Apr 26th, 2012 | By | Category: Fixed Income

BlackRock has announced that its iShares ETFs business has expanded its offering of corporate credit quality ETFs with the launch of two new funds. The new ETFs, both of which trade on BATS, are the iShares Baa – Ba Rated Corporate Bond ETF (QLTB) and the iShares B – Ca Rated Corporate Bond ETF (QLTC).

iShares augments suite of corporate credit quality bond ETFs

The iShares corporate credit quality suite of ETFs provides targeted exposure to the Aaa-A, Baa-Ba, and B-Ca credit-rating segments of the US corporate bond market.

The two new funds are the first ETFs designed to offer targeted exposure to the Baa–Ba and B–Ca credit-quality segments of the US corporate debt market and follow the February launch, on the NYSE Arca, of the iShares Aaa – A Rated Corporate Bond ETF (QLTA), which offers exposure to the highest quality USD-denominated corporate bonds rated Aaa – A.

“The creation of the iShares suite of corporate credit quality ETFs is a significant milestone for investors and the industry,” said Matthew Tucker, Head of iShares Fixed Income Investment Strategy at BlackRock. “Investors have asked for more targeted iShares fixed income ETFs in order to create custom portfolios and adjust their portfolio exposures quickly as debt market conditions change. The new iShares suite transforms how investors can access specific slices of corporate bonds and brings transparent pricing to an otherwise opaque area of fixed income.”

The iShares Baa – Ba Rated Corporate Bond ETF is the first ETF that offers access to corporate debt issues that typically offer higher yields than A-rated issuers with less credit risk than broad high yield debt. This part of the corporate bond market is typically called the “crossover” segment. The fund expense ratio is 0.30%, and is benchmarked to the Barclays Capital US Corporate Baa – Ba Capped Index.

The iShares B – Ca Rated Corporate Bond ETF is the first ETF that focuses exclusively on access to higher yielding high yield corporate debt issuers rated B – Ca. With the purchase of a single fund, investors can access B to Ca-rated high yield bonds with an iShares ETF that are broadly diversified across sectors and maturities. The fund expense ratio is 0.55%, and is benchmarked to the Barclays Capital US Corporate B – Ca Capped Index.

“The new suite of three iShares corporate bond ETFs supports a highly flexible and uniquely modular portfolio management approach to the corporate credit spectrum. Now investors have the ability to tactically tilt fixed income strategies as needed to overweight or underweight portions of the corporate credit spectrum based on quality and yield,” Tucker added.

“Fixed income market conditions can change quickly, so flexibility in managing a portfolio is critical for investors – and a core principle driving the continuous product innovation effort taking place at iShares,” he said.

Tags: ,

Leave a Comment



More in Fixed Income
iShares expands suite of target-maturity municipal bond ETFs
Guggenheim expands suite of high yield defined-maturity BulletShares ETFs

Guggenheim Investments has launched three new high yield corporate bond BulletShares ETFs on the NYSE Arca: the Guggenheim BulletShares 2016 High Yield Corporate...

Pimco to launch Global Advantage Inflation-Linked Bond Strategy ETF (ILB)
Pimco to launch Global Advantage Inflation-Linked Bond Strategy ETF (ILB)

Pimco has announced the forthcoming launch of the Pimco Global Advantage Inflation-Linked Bond Strategy ETF (ILB), an actively managed ETF designed to offer...

Close