Two New iShares Bond ETFs Begin Trading

iShares said that it introduced these funds to “complete the curve exposure of the product line and to meet current client demand in longer term bonds”. 

“The two new iShares Bond Funds complement the existing iShares fixed income product line and provide investors with targeted exposure to the long end of the yield curve in the government and credit markets. These new funds will provide institutional investors and individual investors and their financial advisors additional flexibility in tailoring their fixed income portfolios in the current market environment,” said Matt Tucker, Director of US Fixed Income Strategy, BlackRock.

Credit Bond Fund

The iShares 10+ Year Credit Bond Fund is designed to track to BofA Merrill Lynch 10+ Year US Corporate & Yankees Index. According to the announcement, the Underlying Index is a broad, market value weighted, total rate of return index designed to measure the performance of the long-term, investment-grade U.S. corporate and Yankee bond markets. Component securities include debt issued publicly by U.S. corporations and U.S. dollar-denominated, publicly-issued debt of non-U.S. corporations, foreign government debt and supranational debt.

The securities in the Underlying Index have $250 million or more of outstanding face value, and have at least ten years remaining to maturity or to the first call date in the case of callable perpetual securities, and is rebalanced on the last calendar day of each month. 

As of June 30, 2009, the Underlying Index consisted of 1,093 USD-denominated issues of supranational, national and corporate entities whose principal place of business is in the following countries, according to the announcement: Australia, Barbados, Belgium, Bermuda, Brazil, Canada, the Cayman Islands, Chile, Finland, France, Germany, Hong Kong, Israel, Italy, Luxembourg, Malaysia, Malta, Mexico, the Netherlands, Norway, Peru, Qatar, Russia, South Africa, South Korea, Spain, Sweden, Switzerland, Thailand, Trinidad/Tobago, the United Arab Emirates, the United Kingdom and the United States.

Government/Credit Bond Fund

According to the announcement, the iShares 10+ Year Government/Credit Bond Fund is designed to track the BofA Merrill Lynch 10+ Year US Corporate & Government Index. The Underlying Index is a broad, market value weighted, total rate of return index designed to measure the performance of the long-term, investment-grade U.S. corporate and government bond markets.  

Component securities include publicly-issued U.S. Treasury debt, U.S. government agency debt, debt issued by U.S. and non-U.S. corporations, foreign government debt and supranational debt. The securities in the Underlying Index have $250 million or more of outstanding face value, $1 billion for U.S. Treasuries, and have at least ten years remaining to maturity or to the first call date in the case of callable perpetual securities. The Underlying Index is rebalanced on the last calendar day of each month. 

As of June 30, 2009, the Underlying Index consisted of 1,266 USD-denominated issues of supranational, national and corporate entities whose principal place of business is in the following countries, according to the announcement: Australia, Barbados, Belgium, Bermuda, Brazil, Canada, the Cayman Islands, Chile, Finland, France, Germany, Hong Kong, Israel, Italy, Luxembourg, Malaysia, Malta, Mexico, the Netherlands, Norway, Peru, Qatar, Russia, South Africa, South Korea, Spain, Sweden, Switzerland, Thailand, Trinidad/Tobago, the United Arab Emirates, the United Kingdom and the United States.