BlackRock Adds 5 ETFs to Fixed Maturity Bond Range

BlackRock Adds 5 ETFs to Fixed Maturity Bond Range

Including Europe's first fixed maturity U.S. Treasury ETF.

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Reviewed by: Ron Day
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Edited by: Mark Nacinovich

BlackRock has expanded its fixed maturity iBonds range with the launch of five ETFs, ETF Stream can reveal.

The five ETFs offer exposure to investment-grade corporate bonds across various countries and sectors and U.S. Treasuries.

The two fixed maturity dates are December 2025 and 2027, respectively, with the option of US-dollar or euro-denominated debt.

The five ETFs are:

  • iShares iBonds Dec 2025 Term $ Treasury UCITS ETF (IT25)
  • iShares iBonds Dec 2025 Term $ Corp UCITS ETF (ID25)
  • iShares iBonds Dec 2025 Term € Corp UCITS ETF (IB25)
  • iShares iBonds Dec 2027 Term $ Corp UCITS ETF (ID27)
  • iShares iBonds Dec 2027 Term € Corp UCITS ETF (IB27)

The launch includes Europe’s first fixed maturity US Treasury ETF. IT25 tracks the ICE 2025 Maturity US Treasury UCITS index, which currently has a yield of 4.99%, as at 4 September, and carries a total expense ratio of 0.10%.

The four corporate bond ETFs track respective Bloomberg indices which implement an ESG screen meaning they are classified as Article 8 under the Sustainable Financial Disclosure Regulation.

ID25 and ID27 currently have yields to maturity of 4.08% and 4.04%, respectively, while IB25 and IB27 have yields of 5.68% and 5.38%.

The ETFs carry fees of 0.12% and are listed across European exchanges including the London Stock Exchange, Deutsche Boerse and Euronext Paris.

Brett Pybus, global co-head of iShares fixed income ETFs at BlackRock, said: “iBonds ETFs are designed to mature like a bond, trade like a stock and diversify like a fund, all in an ETF wrapper.

“As the pool of iBonds UCITS ETFs grows, investors will be able to enjoy additional versatility, enabling them to curate portfolios to meet their needs.”

BlackRock ETF

BlackRock unveiled Europe’s first fixed maturity ETFs in August which also offer exposure to investment-grade corporate bonds with maturities of December 2026 and 2028.

The four ETFs launched in August are:

Fixed maturity ETFs allow investors to access parts of the bond market with specific maturities while benefitting from the diversification, transparency and liquidity benefits of ETFs.

With different maturities on offer via iBonds ETFs, BlackRock said investors can create ‘bond ladders’, a strategy that incorporates a portfolio of fixed income securities with different maturities.

By buying bonds with differing maturity dates, investors can stagger final payouts, and reinvest into funds with subsequent consecutive maturities–creating bond ladders. However, this can now be done through a few ETFs rather than numerous bonds.

The world’s largest asset manager added investors can use the ETFs to structure their investments to meet short-term targets and capture defined yields over set periods.

“Each iBonds ETF holds a diversified basket of bonds, and can replace a large number of holdings, minimising the need to source and manage individual bonds,” Pybus said.

Tom Eckett is the editor of ETF Stream, joining as a senior writer in March 2019. He started his career at Investment Week in August 2016 as an asset management correspondent covering ETFs.