BlackRock builds out iBonds target-maturity range with new US Treasury ETFs

Feb 26th, 2020 | By | Category: Fixed Income

BlackRock has launched a new suite of target-maturity iBonds ETFs in the US providing exposure to portfolios of Treasuries maturing in a given year.

BlackRock builds out iBonds target-maturity range with new US Treasury ETFs

BlackRock now offers a total of 33 iBonds ETFs across US Treasury, municipal, investment-grade corporate, and high-yield corporate exposures

Unlike the majority of fixed income ETFs, which hold bonds for a limited period of time to maintain a specific maturity exposure, BlackRock’s iBonds ETFs hold underlying bonds until maturity at which point the fund liquidates.

The funds offer a monthly income as well as a cash distribution at termination, thereby acting like individual bonds.

Investors further benefit from increased liquidity due to the ETF structure.

And by combining funds of varying maturities, investors can build portfolios that meet their future cash requirements.

The initial line-up of iShares iBonds Treasury ETFs target bonds maturing in consecutive years from 2021 through 2029. The funds are linked to ICE Maturity US Treasury Indices which consist of fixed-rate, US dollar-denominated debt issued by the US Treasury that is maturing between 1 January and 15 December in a target year.

The nine ETFs have launched on NYSE Arca, each with an expense ratio of 0.07%. They are:

iShares iBonds Dec 2021 Term Treasury ETF (IBTA US)
iShares iBonds Dec 2022 Term Treasury ETF (IBTB US)
iShares iBonds Dec 2023 Term Treasury ETF (IBTD US)
iShares iBonds Dec 2024 Term Treasury ETF (IBTE US)
iShares iBonds Dec 2025 Term Treasury ETF (IBTF US)
iShares iBonds Dec 2026 Term Treasury ETF (IBTG US)
iShares iBonds Dec 2027 Term Treasury ETF (IBTH US)
iShares iBonds Dec 2028 Term Treasury ETF (IBTI US)
iShares iBonds Dec 2029 Term Treasury ETF (IBTJ US)

BlackRock now offers a total of 33 iBonds ETFs housing nearly $10 billion in assets under management. The other funds in the family provide exposure to municipal (expense ratio of 0.18%), investment-grade corporate (expense ratio of 0.10%), and high-yield corporate (expense ratio of 0.35%) bonds.

Invesco is the other major provider to offer target-maturity ETFs which the firm brands BulletShares. Its range includes 31 funds covering municipal bonds, investment-grade corporates, high-yield corporates, and emerging market debt.

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