BlackRock expands iShares corporate bond ETF suite

Sep 15th, 2017 | By | Category: Fixed Income

BlackRock has continued to build out its range of ETFs offering exposure to corporate bonds with the launch of three new funds.

BlackRock expands iShares corporate bond ETF suite

BlackRock’s new ETF launches include two funds offering exposure to various maturity segments of the investment grade corporate bond universe, as well as one target-maturity ETF.

Two of the new launches, the iShares 5-10 Year Investment Grade Corporate Bond ETF (Bats: MLQD) and the iShares 10+ Year Investment Grade Corporate Bond ETF (Bats: LLQD) offer exposure to different maturity segments of the US dollar-denominated corporate bond universe.

The funds complement the $500 million iShares 0-5 Year Investment Grade Corporate Bond ETF (Nasdaq: SLQD) which launched in October 2013. Together the three ETFs provide access to short, intermediate and long-term bonds, allowing investors to move across the maturity curve and better manage risk. Each has a total expense ratio (TER) of 0.06%.

BlackRock has also introduced the iShares iBonds Dec 2027 Term Corporate ETF (NYSE Arca: IBDS) which increases the firm’s range of target-maturity investment-grade corporate bond ETFs. The suite includes 11 funds covering the years 2017-2027. Each has a TER of 0.10%.

Unlike the majority of fixed income ETFs, which trade in and out of bonds to maintain a target duration exposure, target-maturity ETFs hold underlying bonds until maturity, at which point the fund will liquidate.

By combining funds of varying maturities, investors can build a portfolio that meets their future cash requirements.

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