BlackRock’s iShares has expanded its line of corporate debt ETFs to help fixed-income investors better manage their yield curve exposure in a rising rate environment ahead.
The recently launched iShares 5-10 Year Investment Grade Corporate Bond ETF (BATS: MLQD) and iShares 10+ Year Investment Grade Corporate Bond ETF (BATS: LLQD) both come with a 0.06% expense ratio.
“We revolutionized the fixed income market fifteen years ago with a liquid, transparent ETF for investors to access investment grade bond exposure,” Steve Laipply, Head of U.S. iShares Fixed Income Strategy at BlackRock, said in a note. “With yields remaining stubbornly low, demand for bond ETFs hit record levels in the first half of this year and we believe even more investors will utilize bond ETFs to seek income and help manage risk and liquidity going forward.”
The two new corporate bond ETFs will complement the iShares iBoxx $ Investment Grade Corporate Bond ETF (NYESArca: LQD). MLQD shows a 6.35 year duration and LLQD has a 13.68 year duration while LQD has a 8.39 year duration.
MLQD will try to reflect the performance the Markit iBoxx USD Liquid Investment Grade Intermediate Index, while LLQD seeks to track the Markit iBoxx USD Liquid Investment Grade Long Index. Both funds will track U.S. dollar-denominated investment-grade corporate debt.
However, the new corporate bond ETFs have varying sector leanings. Specifically, MLQD’s top sector weights include banking 26.8%, consumer non-cyclical 16.8% and energy 10.8% while LLQD’s top sector positions include consumer non-cyclical 17.7%, communications 14.7% and banking 13.6%.
Furthermore, BlackRock expanded on its line of target-maturity corporate bond ETFs, adding the iShares iBonds Dec 2027 Term Corporate ETF (NYSEArca: IBDS). IBDS tries to reflect the performance of the Barclays December 2027 Maturity Corporate Index, which is comprised composed of U.S. dollar-denominated, investment-grade corporate bonds maturing in 2027.
For more information on new fund products, visit our new ETFs category.