BlackRock is expanding its lineup of cheap iShares “Core” ETFs with the addition of a U.S. real estate sector and a medium-term global bond option.
On Thursday, November 3, the iShares Core U.S. REIT ETF (USRT) and iShares Core 5-10 Year USD Bond ETF (IMTB) are expected to begin trading, according to a press release. Both of the funds will come with a low 0.08% expense ratio.
The two new ETFs join the 15 other iShares Core options, which recently had their expense ratios lowered ahead of the new Department of Labor fiduciary rule changes.
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“We re-priced our U.S. iShares Core ETFs to set a new market standard for all long-term investors and to lead this growing segment of the ETF market. Over the past month, individual and institutional investors have adopted iShares Core ETFs faster than we expected, adding $4.9bn in net inflows,” Martin Small, U.S. Head of iShares, said in a press release. “iShares Core ETFs offer investors and advisors the tax efficiency, liquidity and quality they need. As advisors prepare for the major shift the Department of Labor (DoL) fiduciary rule requires – providing investors with quality products at great value in the center of their portfolios – we expect adoption of iShares Core ETFs to continue.”
[related_stories]USRT will replace the iShares Real Estate 50 ETF (NYSEArca: FTY), which tracks 50 of the largest U.S. REITs and has a 0.48% expense ratio. Additionally, the new real estate ETF will track the FTSE NAREIT Equity REITs Index, a cap-weighted index designed to measure the performance of U.S. listed equity real estate investment trusts, excluding timber, infrastructure and mortgage REITs.
IMTB, which provides exposure to intermediate-term investment-grade and speculative-grade debt, will fill in a hole in the iShares’ line of broad global bonds. The new ETF will trade alongside the iShares Core 1-5 Year USD Bond ETF (NYSEArca: ISTB), which tracks global bonds with a maturity of one to five years, and the iShares Core Long-Term US Bond ETF (NYSEArca: ILTB), which includes global bonds that mature 10+ years.
“REIT stocks are underused sources of diversification and income. USRT simplifies access to an important portfolio building block with the potential for bond-like yields and stock-like appreciation. Similarly, investors can now take even more control of blending safety, diversification and income objectives with IMTB filling in the intermediate range of bond ETF maturities in the iShares Core line-up,” Small added.
For more information on new fund products, visit our new ETFs category.