BlackRock has expanded its fixed income ETF range amid a low interest rate environment.

BlackRock has launched an exchange-traded fund to invest in sub-investment grade European corporate bonds.

The iShares Euro Corporate Bond BB-B UCITS ETF will provide exposure to over 200 Euro-denominated bonds rated between BB+ and B-.

The fund is physically replicating, meaning it buys the securities of the index, which is market-value weighted with a single issuer accounting for a maximum of 5 per cent and a country cap of 20 per cent. The fund has an expense ratio of 0.5 per cent.

“Investors are diversifying their fixed income exposure as they look for ways to generate income amid historically low interest rates. This ETF provides access to high yield bonds, whilst removing the higher credit risk associated with bonds rated lower than B-,” said Brett Olson, head of fixed income for iShares in Europe, Middle East and Africa.

BlackRock noted that in 2015, fixed income ETFs generated $30.2 billion in assets, of which iShares held the majority. The launch comes after the firm introduced the iShares Euro Corporate Bond Sustainability Screened 0-3yr UCITS ETF, a bond ETF that incorporates environmental, social and governance factors.

iShares, part of BlackRock, is a provider of exchange-traded funds with over 700 funds globally across multiple asset classes and strategies.