iShares Launches Sector Bond ETFs

February 16th at 12:26pm by John Spence

BlackRock’s iShares unit on Thursday listed seven new fixed-income exchange traded funds, including the first ETFs to zero in on sectors and corporate credit quality.

“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.

The new ETFs are:

  • 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 (NYSEArca: GNMA)

BlackRock said it 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.

“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 added. “Now they can overweight and underweight sectors and do sector rotation to capture bond sector returns over business cycle changes.”

Global flows into fixed-income ETFs hit a record $9 billion in January, the investment manager said.

“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 BlackRock’s Tucker. “We continue to research ways to address this growing need by rounding out the iShares fixed income lineup.”

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