BlackRock has cross-listed the iShares Global Aggregate Bond UCITS EUR Hedged ETF to Deutsche Börse’s Xetra and Frankfurt exchanges. The fund provides diversified exposure to investment grade fixed income across currencies, regions and sectors while hedging returns relative to the ETF’s trading currency – the euro.
The fund provides a currency hedge between the currencies of the underlying securities and the ETF’s trading currency – the euro.
The fund tracks the Bloomberg Barclays Global Aggregate Index, a benchmark measure of global investment grade debt from 24 local currency markets that is one of the most widely followed fixed income indices globally. The index provides exposure to treasuries, government-related, corporate and securitized fixed-rate bonds from developed and emerging markets.
Commenting at the fund’s initial launch on London Stock Exchange in November, Brett Olson, head of iShares Fixed Income EMEA, said, “Investors are increasingly diversifying their bond allocation to protect their portfolios from potential sudden market moves. This ETF provides access to broad fixed income exposure meaning investors can avoid the time and resource-consuming task of picking out individual bonds.
“As the broader fixed income market continues to evolve, investors are increasingly seeking the diversification and flexibility that ETFs can offer, and using them alongside traditional security selection. Our 84-strong UCITS bond ETF range provides investors with fixed income building blocks that can act as ballast against equity market risk, while pursuing a consistent income.”
The index is currently yielding 2.5% with an effective duration of 7.0 years. The US is the largest country exposure with 39% of the weight, followed by Japan (16.7%) and France (6.0%). The majority of securities in the index are treasuries (53.5%), with the next largest sectors being mortgage-backed securities (13.7%) and corporate – industrial (10.5%).
Looking at the credit ratings, the majority of the portfolio comprises Aaa securities (39.8%), followed by A (26.6%), Baa (17.3%), and Aa (16.3%).
The ETF accumulates income generated within the fund and has a total expense ratio of 0.10%. On LSE, the fund is also available with USD-hedging, GBP-hedging, or without currency hedging.