BlackRock has launched seven iShares exchange-traded funds, including its first fixed-income ETFs to focus on specific industries and mortgage-backed securities.
Three industry-specific funds were launched focusing on financial services firms, industrial companies and utilities.
The iShares Financials Sector Bond Fund tracks the Barclays Capital U.S. Industrial Bond Index, while the iShares Industrials Sector Bond Fund tracks the Barclays Capital U.S. Industrial Bond Index. The iShares Utilities Sector Bond Fund tracks the Barclays Capital U.S. Utility Bond Index.
Mortgage-backed bonds were targeted by two funds.
The iShares Barclays CMBS Bond Fund focuses on investment grade commercial mortgage-backed securities. The iShares Barclays GNMA Bond Fund, which aims for a diversified portfolio of fixed-rate, mortgage-backed securities issued by the Government National Mortgage Association (GNMA).
“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,” says Matt Tucker, BlackRock’s head of iShares Fixed Income Investment Strategy.
Meanwhile, high quality corporate credit will get covered by the iShares Aaa - A Rated Corporate Bond Fund. This fund targets 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.
The seventh fund launched, the iShares Barclays U.S. Treasury Bond, offers exposure to a wide range of U.S. Treasuries maturities from one-to-30 years. It tracks the Barclays Capital U.S. Treasury Bond Index.
"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," Tucker said. "Now they can overweight and underweight sectors and do sector rotation to capture bond sector returns over business cycle changes."
According to BlackRock Investment Institute's ETP Landscape reporting, global flows into fixedincome ETFs attracted a record $9 billion in net new assets in January.
Tommy Fernandez writes for Money Management Executive.