BondBloxx Investment Management, a new issuer dedicated to launching fixed income ETFs, launched the BondBloxx JP Morgan USD Emerging Markets 1-10 Year Bond ETF (XEMD) on Thursday, a fund that tracks the J.P. Morgan EMBI Global Diversified Liquid 1-10 Year Maturity Index. BondBloxx made its debut in February and has since launched 11 exchange-traded products.
XEMD comes with an expense ratio of 0.29% and lists on Cboe Global Markets.
While several emerging market bond ETFs track J.P. Morgan indexes, XEMD is the first to target a specific maturity range. In this case, the underlying index targets bonds with an average maturity of less than 10 years. Bonds must also have $1 billion in face value outstanding and be denominated in U.S. dollars, according to the prospectus.
The document notes that the index’s most heavily weighted countries at the end of May were Mexico, Indonesia, China, United Arab Emirates and Saudi Arabia out of the 69 countries represented in the index.
The methodology of the index limits the weights of individual countries with high amounts of debt outstanding, shifting more weight into countries with less debt outstanding. The index includes securities from sovereign and quasi-sovereign issuers.
BondBloxx was founded by ETF industry veterans with the goal of providing more targeted fixed income products for an institutional audience. The remainder of its lineup covers the high yield bond space, including several funds that target specific sectors such as consumer cyclicals or health care. Its largest product is the $43 million BondBloxx BB Rated USD High Yield Corporate Bond ETF (XBB).
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