BlackRock launches ‘iBonds’ ETFs on US & Italian Treasuries

Apr 30th, 2024 | By | Category: Fixed Income

BlackRock has introduced new target maturity ‘iBonds’ ETFs in Europe providing exposure to portfolios of US and Italian government bonds maturing in a given year.

Brett Pybus ETFs iShares

Brett Pybus, Global Co-Head of iShares Fixed Income ETFs at BlackRock.

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 funds liquidate.

iBonds ETFs offer a regular 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.

Designed to mature like a bond, trade like a stock, and diversify like a fund, iBonds ETFs make bond laddering simpler with only a few ETFs rather than researching and purchasing numerous individual bonds.

The recent expansion of BlackRock’s iBonds suite in Europe features four funds: two US Treasury ETFs with target maturity years of 2027 and 2029, and two ETFs that grant access to Italian Treasuries, which currently present the highest yields among eurozone government debt, for the 2026 and 2028 maturities.

The US Treasury iBonds ETFs are listed on Euronext Amsterdam and denominated in US dollars, featuring expense ratios of 0.10%. The Italian Treasury iBonds ETFs, meanwhile, are listed on Xetra and Borsa Italiana, denominated in euros, with expense ratios set at 0.12%.

The four ETFs are outlined below:

iShares iBonds Dec 2027 Term $ Treasury UCITS ETF
iShares iBonds Dec 2029 Term $ Treasury UCITS ETF
iShares iBonds Dec 2026 Term € Italy Govt Bond UCITS ETF
iShares iBonds Dec 2028 Term € Italy Govt Bond UCITS ETF

Brett Pybus, Global Co-Head of iShares Fixed Income ETFs at BlackRock, commented: “As the pool of iBonds UCITS ETFs grows, investors will be able to enjoy additional versatility, enabling them to curate portfolios to meet their needs. Building on the success of Treasury iBonds in the US, these new iBonds ETFs provide additional choice and expand access for Europeans to the income provided by both US and Italian government bonds.”

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