BlackRock, Inc. (NYSE:BLK) announced today that its iShares®
Exchange Traded Funds (ETFs) business, the world's largest manager
of ETFs, has launched seven new fixed income funds to help meet
investors’ increased demand for targeted fixed income exposures in
an ETF.
The new funds represent a number of “firsts.” iShares is
offering the first fixed income ETFs that provide exposure to
specific industry sectors, certain sectors within the
mortgage-backed securities marketplace and high credit quality
corporate bonds.
“We are launching these new iShares ETFs specifically in
response to growing demand for liquid and transparent fixed income
investments that are easy to buy and trade. Investors have shown a
clear interest in ETFs as they readjust their fixed income
portfolios,” said Matt Tucker, Head of iShares Fixed Income
Investment Strategy at BlackRock.
According to BlackRock Investment Institute’s ETP Landscape,
global flows into fixed income ETFs reached record levels in
January with the products attracting $9 billion in net new
assets.
“Fixed income ETFs are truly an innovative development giving
investors the ability to adjust their portfolios to express their
investment views and help gain control in a low yield market
environment,” Matt Tucker said. “Based on well-regarded industry
benchmarks and drawing on BlackRock’s fixed income expertise, these
new products expand the ability of investors and advisors to
customize fixed income portfolios.”
Four of the new iShares fixed income ETFs being launched today
reflect strong investor interest in funds that offer access to
market segments other than broad, aggregate bond market exposure.
These products include:
- iShares Aaa – A Rated Corporate Bond
Fund (NYSEArca: QLTA) – The first ETF to provide single-trade
access to the highest quality corporate debt issuers, broadly
diversified across sectors and maturities. The fund is designed to
track the Barclays Capital U.S. Corporate Aaa – A Capped
Index.
- iShares Barclays U.S. Treasury Bond
Fund (NYSEArca: GOVT) – Offers exposure to a broad range of
U.S. Treasuries maturities (1-30 years) in one trade. Designed to
track the Barclays Capital U.S. Treasury Bond Index, the new fund
allows investors to shift towards U.S. Treasuries in times of
negative market sentiment.
- iShares Barclays CMBS Bond Fund
(NYSEArca: CMBS) – The first ETF to provide exposure to
investment grade commercial mortgage-backed securities. The new
iShares ETF can complement the iShares Barclays MBS Bond Fund
(NYSE: MBB) and help investors express tactical views on the
commercial real estate market.
- iShares Barclays GNMA Bond Fund
(NASDAQ: GNMA) – The first ETF to offer a flexible and
cost-efficient way to invest in a diversified portfolio of
fixed-rate, mortgage-backed securities issued by the Government
National Mortgage Association (GNMA). GNMAs are the only mortgage
securities explicitly supported by the full faith and credit of the
U.S. government.
Three of the new iShares ETFs represent the first sector fixed
income ETFs. “For the first time, investors and advisors can fine
tune sector exposure in their fixed income portfolios just like
they have done in their equity portfolios,” Matt Tucker said. “Now
they can overweight and underweight sectors and do sector rotation
to capture bond sector returns over business cycle changes.” These
products are:
- iShares Financials Sector Bond Fund
(NYSEArca: MONY) – The first ETF to offer targeted exposure to
investment grade U.S. corporate financial sector bonds. Today 33%
of the U.S. corporate bond market comprises financials sector
bonds. The new fund is designed to track the Barclays Capital U.S.
Financial Institutions Capped Bond Index.
- iShares Industrials Sector Bond Fund
(NYSEArca: ENGN) – The first ETF to express a view on the
industrial sector, which comprises 56% of the U.S. corporate bond
market. The new fund is designed to track the Barclays Capital U.S.
Industrial Bond Index.
- iShares Utilities Sector Bond Fund
(NYSEArca: AMPS) – The first ETF to provide a flexible and
cost-efficient way to express a view on the U.S. utility corporate
bond sector. It is designed to track the Barclays Capital U.S.
Utility Bond Index.
“As investors continue to seek more stable returns, they will
increasingly rethink their fixed income portfolios. And, we believe
investors will rely more and more on ETFs for their liquid access
and transparency,” said Tucker. “We continue to research ways to
address this growing need by rounding out the iShares fixed income
lineup.”
Editor’s Notes:
Details about the new funds can be found using the links
below.
iShares Barclays U.S. Treasury Bond Fund (NYSEArca: GOVT)
iShares Barclays CMBS Bond Fund (NYSEArca: CMBS)
iShares Financials Sector Bond Fund (NYSEArca: MONY)
iShares Industrials Sector Bond Fund (NYSEArca: ENGN)
iShares Utilities Sector Bond Fund (NYSEArca: AMPS)
iShares Aaa – A Rated Corporate Bond Fund (NYSEArca: QLTA)
iShares Barclays GNMA Bond Fund (NASDAQ: GNMA)
About BlackRock
BlackRock is a leader in investment management, risk management
and advisory services for institutional and retail clients
worldwide. At December 31, 2011, BlackRock’s AUM was $3.513
trillion. BlackRock offers products that span the risk spectrum to
meet clients’ needs, including active, enhanced and index
strategies across markets and asset classes. Products are offered
in a variety of structures including separate accounts, mutual
funds, iShares® (exchange-traded funds), and other pooled
investment vehicles. BlackRock also offers risk management,
advisory and enterprise investment system services to a broad base
of institutional investors through BlackRock Solutions®.
Headquartered in New York City, as of December 31, 2011, the firm
has approximately 10,100 employees in 27 countries and a major
presence in key global markets, including North and South America,
Europe, Asia, Australia and the Middle East and Africa. For
additional information, please visit the Company's website at
www.blackrock.com.
About iShares
iShares is the global product leader in exchange traded funds
with over 500 funds globally across equities, fixed income and
commodities, which trade on 20 exchanges worldwide. The iShares
Funds are bought and sold like common stocks on securities
exchanges. The iShares Funds are attractive to many individual and
institutional investors and financial intermediaries because of
their relative low cost, tax efficiency and trading flexibility.
Investors can purchase and sell shares through any brokerage firm,
financial advisor, or online broker, and hold the funds in any type
of brokerage account. The iShares customer base consists of the
institutional segment of pension plans and fund managers, as well
as the retail segment of financial advisors and high net worth
individuals.
Carefully consider the funds' investment objectives, risk
factors, and charges and expenses before investing. This and
other information can be found in the funds' prospectuses, which
may be obtained by calling 1-800-iShares (1-800-474-2737) or by
visiting www.iShares.com. Read the prospectus
carefully before investing.
Investing involves risk, including possible loss of
principal.
Bonds and bond funds generally decrease in value as interest
rates rise. The Funds may be subject to credit risk, which refers
to the possibility that the debt issuers may not be able to make
principal and interest payments or may have their debt downgraded
by ratings agencies. In addition to the normal risks associated
with investing, narrowly focused investments typically exhibit
higher volatility. Commercial mortgage-backed securities ("CMBS")
and mortgage-backed securities (“MBS”) represent interests in
"pools" of mortgages and are subject to credit, prepayment and
extension risk, and therefore react differently to changes in
interest rates than other bonds. Small movements in interest rates
may quickly and significantly reduce the value of CMBS and MBS. An
investment in the Fund(s) is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government
agency. Diversification may not protect against market risk.
This material represents an assessment of the market environment
at a specific time and is not intended to be a forecast of future
events or a guarantee of future results. This information should
not be relied upon by the reader as research or investment advice
regarding the funds or any security in particular.
The strategies discussed are strictly for illustrative and
educational purposes and should not be construed as a
recommendation to purchase or sell, or an offer to sell or a
solicitation of an offer to buy any security. There is no guarantee
that any strategies discussed will be effective.
Transactions in shares of the iShares Funds will result in
brokerage commissions and will generate tax consequences. iShares
Funds are obliged to distribute portfolio gains to shareholders.
Shares of the iShares Funds may be sold throughout the day on the
exchange through any brokerage account. However, shares may only be
redeemed directly from a Fund by Authorized Participants, in very
large creation/redemption units. There can be no assurance that an
active trading market for shares of an ETF will develop or be
maintained.
The iShares Funds ("Funds") are distributed by SEI Investments
Distribution Co. ("SEI"). BlackRock Fund Advisors ("BFA") serves as
the investment advisor to the Funds. BlackRock Investments, LLC
(“BRIL”), assists in the marketing of the Funds. BFA and BRIL are
affiliates of BlackRock, Inc., none of which is affiliated with
SEI.
The iShares Funds are not sponsored, endorsed or issued by
Barclays Capital, nor does this company make any representation
regarding the advisability of investing in the Funds. Neither SEI,
nor BlackRock Institutional Trust Company, N.A., nor any of their
affiliates, are affiliated with the company listed above.
* Not FDIC Insured * No Bank Guarantee * May Lose
Value
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