Fixed income ETF specialist BondBloxx Investment Management has unveiled its latest innovation, an emerging markets government bond fund targeting debt with average lives under ten years.

Tony Kelly, co-Founder of BondBloxx Investment Management.

The BondBloxx JP Morgan USD Emerging Markets 1-10 Year Bond ETF (XEMD US) has been listed on Cboe BZX Exchange with an expense ratio of 0.29%.

The fund is linked to the JP Morgan EMBI Global Diversified Liquid 1-10 Year Maturity Index which is derived from the flagship JP Morgan EMBI Global Diversified Index.

The parent universe includes US dollar-denominated fixed and floating-rate debt securities issued by sovereign and quasi-sovereign entities in emerging market countries.

Whole countries can be removed from the universe if their Gross National Income per capita is above JP Morgan’s Index Income Ceiling (currently $20,938) or if their long-term foreign currency sovereign credit rating is “A-“ or above for three consecutive years.

The ETF’s index, meanwhile, only includes securities with at least $1 billion par outstanding (compared to $500 million for the parent universe) and a time to maturity between six months and ten years.

Constituents are weighted by market value while capping the weight of any country at 10% to reduce the influence of sovereigns with significant debt stocks.

BondBloxx made its debut in February by introducing a suite of ETFs providing exposure to high yield corporate bonds while diversifying and managing risk according to industry exposure. The firm has also launched a trio of funds targeting specific credit buckets within the high yield corporate bond segment.

Tony Kelly, co-Founder of BondBloxx Investment Management, said: “Today’s volatile markets present more challenges than ever for fixed income investors. At BondBloxx, we’re working for, and with, investors to develop new products that address these challenges – like providing more control over duration risk.”