Fund Management
iShares Launches Fixed Income, Emerging Market-Focused ETFs
iShares, the exchange-traded funds platform of BlackRock, has launched the Barclays Capital EM Asia Local Govt Capped Bond fund and the MSCI Mexico IMI Capped fund on the London Stock Exchange.
The Barclays Capital EM Asia fund is designed for investors searching for emerging markets income, while the MSCI Mexico IMI fund is aimed at those in search of single-country emerging market exposure, the firm said.
The Barclays Capital EM Asia fund is also Europe’s first ETF to offer exposure to fixed-rate government bonds issued by Asian emerging market countries and denominated in their local currencies. The fund is physically-replicating with "full transparency into the underlying bonds," and has a total expense ratio of 0.50 per cent, the firm said.
The countries the fund offers exposure to include Thailand, South Korea, Philippines, Malaysia and Indonesia.
The firm said it has worked closely with Barclays Capital to construct the index which the ETF tracks - this involved implementing a cap to ensure that no single country accounts for more than 40 per cent of the index.
BlackRock’s fixed income team in Singapore will assume responsibility for the portfolio management and trading of the fund.
The MSCI Mexico IMI fund - which has garnered approximately $1 billion to date - is also physically-replicating and provides exposure to the largest and most liquid stocks in the market. It is capped so that no single group entity accounts for more than 30 per cent of the index and the fund has a total expense ratio of 0.65 per cent.
“European investors are continuing to search for new sources of yield, and new ways in which they can secure sustainable income streams,” said Axel Lomholt, head of iShares product development for Europe, the Middle East and Africa.
“Asian debt markets have grown steadily over the last ten years, and bonds denominated in local currencies provide a different yield and risk profile to US dollar-denominated debt, allowing investors to diversify their fixed income holdings,” he added.
BlackRock had $3.513 trillion in assets under management at 31 December 2011.