BlackRock has launched a new suite of four ETFs in the US, designed to deliver systematic bond laddering strategies across US Treasuries, TIPS, investment-grade corporate debt, and high-yield bonds.

Karen Veraa, Head of US iShares Fixed Income Strategy at BlackRock.

These ETFs, listed on NYSE Arca, aim to simplify bond laddering by offering diversified, one-ticker solutions that maintain bond ladders over time.

The new funds are the iShares iBonds 1-5 Year Treasury Ladder ETF (LDRT US), iShares iBonds 1-5 Year TIPS Ladder ETF (LDRI US), iShares iBonds 1-5 Year Corporate Ladder ETF (LDRC US), and iShares iBonds 1-5 Year High Yield and Income Ladder ETF (LDRH US).

Each ETF operates as an ETF-of-ETFs, investing across BlackRock’s existing iBonds ETFs, which are constructed entirely of bonds maturing in specific years.

Unlike traditional fixed income ETFs, which regularly rebalance their holdings to maintain a targeted maturity profile, iBonds ETFs hold their bonds until maturity, at which point the funds are liquidated. This structure enables iBonds ETFs to replicate the income and cash distributions of individual bonds while providing the benefits of an ETF, including enhanced liquidity and ease of trading.

The new iBonds Ladder ETFs are designed to further streamline the bond laddering process. Each fund is linked to a proprietary BlackRock index that allocates equally (20% each) across five iShares iBonds ETFs with consecutive target maturity dates. Annually, the indices are rebalanced and reconstituted, replacing the expiring iBonds ETF with one maturing five years later, while maintaining equal weighting across the portfolio. This approach ensures a consistent and systematic bond laddering strategy without requiring investors to manually adjust holdings.

BlackRock’s iBonds ETF franchise currently manages over $32 billion in assets across its various fixed income segments. The new iBonds Ladder ETFs build on this success, offering a simplified way to manage interest rate risk, seek income, and diversify portfolios.

Karen Veraa, Head of US iShares Fixed Income Strategy at BlackRock, commented: “In 2010, BlackRock pioneered defined maturity ETFs with the introduction of iBonds ETFs, helping advisors build bond ladders and efficiently manage multiple client accounts. The iShares iBonds Ladder ETFs will seamlessly extend the iBonds franchise, offering a turnkey solution to bond laddering that makes investing easier and more affordable. This approach will empower advisors and clients to better manage interest rate risk, pursue higher yields, and enhance portfolio diversification.”

The expense ratios for the new ETFs are as follows: LDRT at 0.07%, LDRI and LDRC at 0.10%, and LDRH at 0.35%. Each fund provides monthly distributions.