The First Fixed Income ETFs to Target Sectors and Corporate Credit
Quality
SAN FRANCISCO--(BUSINESS WIRE)--
BlackRock, Inc. (NYSE:BLK) announced today that its iShares® Exchange
Traded Funds (ETFs) business, the world's largest manager of ETFs, has
launched seven new fixed income funds to help meet investors’ increased
demand for targeted fixed income exposures in an ETF.
The new funds represent a number of “firsts.” iShares is offering the
first fixed income ETFs that provide exposure to specific industry
sectors, certain sectors within the mortgage-backed securities
marketplace and high credit quality corporate bonds.
“We are launching these new iShares ETFs specifically in response to
growing demand for liquid and transparent fixed income investments that
are easy to buy and trade. Investors have shown a clear interest in ETFs
as they readjust their fixed income portfolios,” said Matt Tucker, Head
of iShares Fixed Income Investment Strategy at BlackRock.
According to BlackRock Investment Institute’s ETP Landscape, global
flows into fixed income ETFs reached record levels in January with the
products attracting $9 billion in net new assets.
“Fixed income ETFs are truly an innovative development giving investors
the ability to adjust their portfolios to express their investment views
and help gain control in a low yield market environment,” Matt Tucker
said. “Based on well-regarded industry benchmarks and drawing on
BlackRock’s fixed income expertise, these new products expand the
ability of investors and advisors to customize fixed income portfolios.”
Four of the new iShares fixed income ETFs being launched today reflect
strong investor interest in funds that offer access to market segments
other than broad, aggregate bond market exposure. These products include:
-
iShares Aaa – A Rated Corporate Bond Fund (NYSEArca: QLTA) –
The first ETF to provide single-trade access to the highest quality
corporate debt issuers, broadly diversified across sectors and
maturities. The fund is designed to track the Barclays Capital U.S.
Corporate Aaa – A Capped Index.
-
iShares Barclays U.S. Treasury Bond Fund (NYSEArca: GOVT) –
Offers exposure to a broad range of U.S. Treasuries maturities (1-30
years) in one trade. Designed to track the Barclays Capital U.S.
Treasury Bond Index, the new fund allows investors to shift towards
U.S. Treasuries in times of negative market sentiment.
-
iShares Barclays CMBS Bond Fund (NYSEArca: CMBS) – The first
ETF to provide exposure to investment grade commercial mortgage-backed
securities. The new iShares ETF can complement the iShares Barclays
MBS Bond Fund (NYSE: MBB) and help investors express tactical views on
the commercial real estate market.
-
iShares Barclays GNMA Bond Fund (NASDAQ: GNMA) – The first ETF
to offer a flexible and cost-efficient way to invest in a diversified
portfolio of fixed-rate, mortgage-backed securities issued by the
Government National Mortgage Association (GNMA). GNMAs are the only
mortgage securities explicitly supported by the full faith and credit
of the U.S. government.
Three of the new iShares ETFs represent the first sector fixed income
ETFs. “For the first time, investors and advisors can fine tune sector
exposure in their fixed income portfolios just like they have done in
their equity portfolios,” Matt Tucker said. “Now they can overweight and
underweight sectors and do sector rotation to capture bond sector
returns over business cycle changes.” These products are:
-
iShares Financials Sector Bond Fund (NYSEArca: MONY) – The
first ETF to offer targeted exposure to investment grade U.S.
corporate financial sector bonds. Today 33% of the U.S. corporate bond
market comprises financials sector bonds. The new fund is designed to
track the Barclays Capital U.S. Financial Institutions Capped Bond
Index.
-
iShares Industrials Sector Bond Fund (NYSEArca: ENGN) – The
first ETF to express a view on the industrial sector, which comprises
56% of the U.S. corporate bond market. The new fund is designed to
track the Barclays Capital U.S. Industrial Bond Index.
-
iShares Utilities Sector Bond Fund (NYSEArca: AMPS) – The first
ETF to provide a flexible and cost-efficient way to express a view on
the U.S. utility corporate bond sector. It is designed to track the
Barclays Capital U.S. Utility Bond Index.
“As investors continue to seek more stable returns, they will
increasingly rethink their fixed income portfolios. And, we believe
investors will rely more and more on ETFs for their liquid access and
transparency,” said Tucker. “We continue to research ways to address
this growing need by rounding out the iShares fixed income lineup.”
Editor’s Notes:
Details about the new funds can be found using the links below.
iShares
Barclays U.S. Treasury Bond Fund (NYSEArca: GOVT)
iShares
Barclays CMBS Bond Fund (NYSEArca: CMBS)
iShares
Financials Sector Bond Fund (NYSEArca: MONY)
iShares
Industrials Sector Bond Fund (NYSEArca: ENGN)
iShares
Utilities Sector Bond Fund (NYSEArca: AMPS)
iShares
Aaa – A Rated Corporate Bond Fund (NYSEArca: QLTA)
iShares
Barclays GNMA Bond Fund (NASDAQ: GNMA)
About BlackRock
BlackRock is a leader in investment management, risk management and
advisory services for institutional and retail clients worldwide. At
December 31, 2011, BlackRock’s AUM was $3.513 trillion. BlackRock offers
products that span the risk spectrum to meet clients’ needs, including
active, enhanced and index strategies across markets and asset classes.
Products are offered in a variety of structures including separate
accounts, mutual funds, iShares® (exchange-traded
funds), and other pooled investment vehicles. BlackRock also offers risk
management, advisory and enterprise investment system services to a
broad base of institutional investors through BlackRock Solutions®.
Headquartered in New York City, as of December 31, 2011, the firm has
approximately 10,100 employees in 27 countries and a major presence in
key global markets, including North and South America, Europe, Asia,
Australia and the Middle East and Africa. For additional information,
please visit the Company's website at www.blackrock.com.
About iShares
iShares is the global product leader in exchange traded funds with over
500 funds globally across equities, fixed income and commodities, which
trade on 20 exchanges worldwide. The iShares Funds are bought and sold
like common stocks on securities exchanges. The iShares Funds are
attractive to many individual and institutional investors and financial
intermediaries because of their relative low cost, tax efficiency and
trading flexibility. Investors can purchase and sell shares through any
brokerage firm, financial advisor, or online broker, and hold the funds
in any type of brokerage account. The iShares customer base consists of
the institutional segment of pension plans and fund managers, as well as
the retail segment of financial advisors and high net worth individuals.
Carefully consider the funds' investment objectives, risk factors,
and charges and expenses before investing. This and other
information can be found in the funds' prospectuses, which may be
obtained by calling 1-800-iShares (1-800-474-2737) or by visiting www.iShares.com.
Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal.
Bonds and bond funds generally decrease in value as interest rates rise.
The Funds may be subject to credit risk, which refers to the possibility
that the debt issuers may not be able to make principal and interest
payments or may have their debt downgraded by ratings agencies. In
addition to the normal risks associated with investing, narrowly focused
investments typically exhibit higher volatility. Commercial
mortgage-backed securities ("CMBS") and mortgage-backed securities
(“MBS”) represent interests in "pools" of mortgages and are subject to
credit, prepayment and extension risk, and therefore react differently
to changes in interest rates than other bonds. Small movements in
interest rates may quickly and significantly reduce the value of CMBS
and MBS. An investment in the Fund(s) is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government
agency. Diversification may not protect against market risk.
This material represents an assessment of the market environment at a
specific time and is not intended to be a forecast of future events or a
guarantee of future results. This information should not be relied upon
by the reader as research or investment advice regarding the funds or
any security in particular.
The strategies discussed are strictly for illustrative and educational
purposes and should not be construed as a recommendation to purchase or
sell, or an offer to sell or a solicitation of an offer to buy any
security. There is no guarantee that any strategies discussed will be
effective.
Transactions in shares of the iShares Funds will result in brokerage
commissions and will generate tax consequences. iShares Funds are
obliged to distribute portfolio gains to shareholders. Shares of the
iShares Funds may be sold throughout the day on the exchange through any
brokerage account. However, shares may only be redeemed directly from a
Fund by Authorized Participants, in very large creation/redemption
units. There can be no assurance that an active trading market for
shares of an ETF will develop or be maintained.
The iShares Funds ("Funds") are distributed by SEI Investments
Distribution Co. ("SEI"). BlackRock Fund Advisors ("BFA") serves as the
investment advisor to the Funds. BlackRock Investments, LLC (“BRIL”),
assists in the marketing of the Funds. BFA and BRIL are affiliates of
BlackRock, Inc., none of which is affiliated with SEI.
The iShares Funds are not sponsored, endorsed or issued by Barclays
Capital, nor does this company make any representation regarding the
advisability of investing in the Funds. Neither SEI, nor BlackRock
Institutional Trust Company, N.A., nor any of their affiliates, are
affiliated with the company listed above.
* Not FDIC Insured * No Bank Guarantee * May Lose Value
BlackRock, Inc.
Christine Hudacko, 415-670-2687
christine.hudacko@blackrock.com
Source: BlackRock, Inc.