Daily ETF Watch: iShares Fills iBonds Holes

December 12, 2014

A new flurry of filings from BlackRock’s iShares unit indicates the world’s biggest ETF provider is planning to extend the coverage of its family of target-maturity bond ETFs, as well as back-fill some of the blank spots in its coverage.

The iBonds corporate ETFs series currently has just two ETFs that mature in December of their targeted years: the iShares iBonds Dec 2016 Corporate ETF (IBDF) and iShares iBonds Dec 2018 Corporate ETF (IBDH). The two funds have a total of about $20 million in assets under management.

The latest batch of filings includes seven additions to the December-maturing corporate iBonds ETFs, covering 2017, 2019 and 2021 through 2025. iShares filed for the 2020 fund back in September.

It appears that the ETF giant is looking to simplify and streamline its lineup of iBonds funds to increase their appeal. Its competitor in the space, Guggenheim, has a fairly straightforward offering via its BulletShares family.

It offers 11 corporate bond BulletShares that mature in 11 consecutive years, covering each year from 2014 through 2024, respectively. The BulletShares high-yield corporate bond family covers nine consecutive years, 2014 through 2022.

Meanwhile, the iShares iBonds family is all over the map. It has four March-maturing corporate bond ETFs covering the years 2016, 2018, 2020 and 2023 in addition to the December-maturing funds. It also has four corporate ex-financials iBonds ETFs covering the same four years.

Its series of municipal bond target-maturity ETFs is a bit more intuitive in its offerings, with six funds covering each year from 2015 through 2020. The municipal bond iBonds ETFs mature in August of each year, so the 2014 fund has already closed.

Since one of the most popular uses of target-maturity bond ETFs is implementing them in laddering strategies, Guggenheim’s lineup would appear to have an advantage. And indeed, its total offering of investment-grade corporate bond BulletShares has nearly $3.4 billion in assets under management. Meanwhile, iShares’ entire offering of investment-grade corporate bond iBonds has accumulated about $500 million.

The proposed iShares funds include the following:

There was also a filing for another municipal bond iBonds ETF, the iShares iBonds Sep 2021 AMT-Free Muni Bond ETF, which will join a family of municipal bond ETFs that has accumulated nearly $500 million in AUM.

Like the rest of the iBonds family, all of the proposed ETFs will track indexes provided by S&P. No tickers or fees were included in any of the filings, but all of the corporate bond iBonds ETFs currently trading have net expense ratios of 0.10 percent. All of the municipal bond iBonds charge 0.18 percent.

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