BondBloxx added a trio of ETFs covering the bottom credit tier of the investment-grade corporate bond market. Each fund targets a different maturity range. They and their tickers are as follows:
- BondBloxx BBB Rated 1-5 Year Corporate Bond ETF (NYSE Arca: BBBS)
- BondBloxx BBB Rated 5-10 Year Corporate Bond ETF (NYSE Arca: BBBI)
- BondBloxx BBB Rated 10+ Year Corporate Bond ETF (NYSE Arca: BBBL)
The three funds track market-value-weighted indexes from Bloomberg and have expense ratios of 0.19%.
“Investors who own broad investment grade ETFs in different maturity categories can now use these new BondBloxx ETFs to target BBB-rated bonds and benefit from the higher coupon of this compelling segment within the investment grade corporate bond market,” BondBloxx’s Co-Founder Tony Kelly said.
The press release cites data from Bloomberg indicating, for 20 years, BBB-rated corporate bonds have performed better than the broader investment-grade corporate bond space. They have approximately the same level of default risk to the tune of 50 basis points annually. The BondBloxx team says the fundamentals for the space remain strong.
“Investment grade corporates continue to be an area of focus for investors, and within that universe, BBBs offer a unique opportunity for potential outperformance,” BondBloxx Investment Strategist JoAnne Bianco said. She added that prior to today’s launch, investors had few choices in terms of accessing specific exposures within the BBB tier for corporate debt.
A Focus on Fixed Income
BondBloxx was founded by ETF industry veterans who saw a need for products offering more precise exposures to fixed income securities. The firm entered the market in early 2022. It now offers 23 ETFs that drill down to cover specific slices of the bond market based. They are based on bond type, equity sector and credit rating.
BondBloxx currently has roughly $2.7 billion in assets under management. Its largest fund is the BondBloxx Bloomberg Six Month Target Duration US Treasury ETF (XHLF). It has $1.2 billion in assets under management.
“There’s growing demand for fixed income ETFs from advisors in the past year. It’s great to see the BondBloxx team continue to expand its lineup with innovative products,” said Todd Rosenbluth, VettaFi’s head of research.
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