BlackRock, the parent company of iShares, has filed for a new international sovereign debt fixed-income exchange traded fund (ETF) designed to protect investors from the ravages of inflation.
The Global Inflation-Linked Bond Fund will track the BofA Merrill Lynch Global Diversified Inflation-Linked Index, a market-value-weighted index designed to measure the performance of inflation-linked sovereign debt. Among the economies in the index include Australia, Brazil, Canada, Chile, France, Germany, Greece, Israel, Italy, Japan, Mexico, Poland, South Africa, Sweden, Turkey, the U.K. and the United States. No issuer can account for more than 22.5% of assets. No ticker symbol is available yet. [TIPS Have Appeal Even When Inflation Is Not.]
The index is rebalanced on the last day of each month. Issuers are removed if they default on any of their debt.
Investors have become increasingly concerned about the trillions of dollars in stimulus spending in the developed world, says Steve Dew for Index Universe. That’s made inflation-linked bonds an appealing destination. [Building a Bond Portfolio.]
Tisha Guerrero contributed to this article.
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