BlackRock launches floating rate bond ETF

Added 12th July 2017

BlackRock has added a floating rate bond ETF to its line-up of passive products that aims to navigate rising rates.

BlackRock launches floating rate bond ETF

The new iShares UCITS ETF will provide exposure to US dollar denominated floating rate bonds, which offers coupons that adjust to reflect changes in interest rates unlike traditional bonds.

It has a total expense ratio of 0.10% and is physically-replicating.

“Concerns about rising rates have prompted many investors to consider moving out of longer-duration bonds,” said Brett Pybus, head of iShares EMEA fixed income strategy at BlackRock.

“This fund provides investors with a way to reduce duration and protect portfolios against periods of rising interest rates.” 

The new ETF provides investors with exposure to investment grade bonds or higher that have a maturity of five years or less and also “offers an attractive yield compared with money market funds,” according to Pybus.

“Our focus continues to be on developing a broad and granular range of ETFs that help investors build precise and cost efficient portfolios, and this fund is testament to that,” he added.

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Kristen McGachey

Senior Reporter

Kristen joined Last Word Media and the world of financial journalism in April 2016, leaving behind a career in a legal publishing firm as a senior researcher turned assistant editor.

This native Angelino initially moved to the UK in 2008 to complete her undergraduate studies at the University of Nottingham. She subsequently obtained a Masters degree in Philosophy with Literature from the University of Warwick.

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