iShares Plans Active Bond ETF

By
February 06, 2013
Share:

iShares joins a crowded pipeline of actively managed bond ETFs with a short-term fund.

iShares, the largest purveyor of ETFs globally, filed paperwork with regulators to market an actively managed bond fund that would invest in dollar-denominated corporate and government debt, the latest provider to turn to active management in the fixed-income space.

The iShares Liquidity Income Fund—an ETF designed to generate current income and preserve capital—would join the likes of the Guggenheim Enhanced Core Bond ETF (NYSEArca: GIY) as well as other fixed-income active portfolios from WisdomTree and FlexShares currently sitting in the regulatory pipeline.

The portfolio will comprise primarily investment-grade fixed- and floating-rate debt that’s dollar-denominated, the filing said. It would also have a dollar-weighted average life of one year or less—that’s the weighted average of the times by which the principal has to be repaid.

iShares has been slowly filing for active ETFs to add to its roster of 200-plus passive ETFs that currently dominate the U.S. ETF market in terms of assets. Many have said that the fixed-income space is particularly prospective for active management thanks to its many inefficiencies that aren’t easily captured in a passive strategy.

Last year, the firm put into registration active ETFs canvassing equities, currencies and a sovereign bond fund.

Derivatives In The Mix

Other than corporate and government bonds, the fund may also invest in securities from non-U.S. issuers, asset-backed and mortgage-backed securities, municipal bonds and money market instruments, among other things.

The planned ETF is not a money market fund and does not seek to maintain a stable net asset value of $1 per share, the company said in the filing.

“The fund may, to a limited extent, engage in derivatives transactions that include futures contracts, options and swaps,” it added.

No ticker or fees were detailed in the filing.

 

ETF.COM CHANNELS

Trying to figure out alternatives ETFs? Use our alternatives ETFs channel, library and ETF screener!

Want to learn more about smart-beta ETFs? Check out our smart-beta guide, essentials library and ETF screener!

ETF DAILY DATA

A roster of U.S. fixed-income ETFs topped the list of ETF creations Monday, Aug. 31, as investors poured $1.2 billion into the segment.

'SPY' paced State Street's issuer-leading inflows Monday, Aug. 31, as total U.S.-listed ETF assets hit $2.029 trillion.

ETF.COM ANALYST BLOGS

By Dave Nadig

With many ETFs currently trading well off fair value, what’s an ETF investor to do? Don’t panic.

By Matt Hougan

Out-of-favor funds can bring attractive returns.

By Matt Hougan

New data from Charles Schwab show that the death of mutual funds is happening faster than we thought.

By Dave Nadig

Grab the popcorn. Precidian just doubled-down on its nontransparent active ETF proposal with the SEC this morning.

ETF INDUSTRY PERSPECTIVE

By John Del Vecchio

An index that goes long financially sound companies and shorts the ones with problematic balance sheets.

By Dan Draper

The nature of retirement is changing. How can investors adapt?

By Invesco PowerShares

A more in-depth look at the smart-beta survey's results.