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BlackRock launches global bond ETF

BlackRock launches global bond ETF

BlackRock has launched an ETF which tracks the performance of the global investment grade bond market, across currency region and sector.

Investment grade bonds are those with a credit rating of BBB or higher, and so are rated as being less risky than high yield or so-called junk bonds.

The iShares Global Aggregate Bond Ucits ETF offers shares classes that hedge investor’s currency risk to dollars, sterling or Euros.

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The fund tracks the Bloomberg Barclays Global index.

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 annual charge is 0.10 per cent.

Patrick Connolly, head of communications at advice firm Chase De Vere, said: “BlackRock is a market leader in passive investments and this new launch provides diversified fixed interest exposure, full replication and low charges.

"While most investors should hold fixed interest in their portfolios, and passive investments are becoming ever more popular, there is a question over whether a passive approach works as well for fixed interest as it does for some equity markets."

david.thorpe@ft.com