BlackRock cross-lists development bank bond ETF on SIX

Jan 23rd, 2020 | By | Category: Fixed Income

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BlackRock has cross-listed the iShares $ Development Bank Bonds UCITS ETF on SIX Swiss Exchange.

BlackRock cross-lists development bank bond ETF on SIX

BlackRock has cross-listed the iShares $ Development Bank Bonds UCITS ETF on SIX Swiss Exchange.

The fund, which launched in December 2019, offers access to a portfolio of high-quality bonds issued by development banks.

Development banks are supranational institutions that have been created to finance projects with a positive social and economic impact in developing countries. Examples of such institutions include the World Bank and the European Bank for Reconstruction and Development.

Proceeds raised from the issuance of development bank bonds typically support projects that are consistent with the United Nations’ 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals. These range from the development of core infrastructure to the protection of the environment.

The fund delivers its exposure by tracking the FTSE World Broad Investment-Grade USD Multilateral Development Bank Bond Capped Index using a sampling-based physical replication process.

The index consists of US dollar-denominated fixed-rate bonds issued by multilateral development banks with shareholder lists that comprise all G7 member countries. Eligible bonds must be rated investment grade and have more than one year remaining to maturity and at least $500m outstanding.

Constituents are weighted by market capitalization subject to an issuer cap of 25%. Rebalancing occurs on a monthly basis.

The index currently has a yield to maturity of 1.63% and an effective duration of 3.14 years.

The new share class has listed on SIX in US dollars under the ticker DDBB SW. The fund is already available in US dollars on Euronext Amsterdam (DDBB NA). Both share classes capitalize income within their portfolios.

The ETF has accumulated $120 million in assets under management since launch and comes with an expense ratio of 0.15%.

The UBS ETF – Sustainable Development Bank Bonds UCITS ETF is currently the only other dedicated development bank bond ETF listed in Europe. This fund, which is linked to the Solactive UBS Global Multilateral Development Bank Bond USD 25% Issuer Capped TR Index, comes with an expense ratio of 0.18% and has accumulated approximately $240m in assets since its launch in November 2018.

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