iShares Innovates with iBonds ETFs

Bond ETFs are increasingly being used as an alternative to picking individual bonds which can be costly for investors. Demand for fixed income has been strong this year. According to data from Trackinsight, corporate investment grade bond ETFs in Europe saw almost €13 bn inflows over the first seven months of 2023 as investors looked to take advantage of the significant spike in yields. The era of negative interest rates is now in our rearview mirror. As an illustration, Germany’s 10-year yield has just reached a 12-year high above 2.60%. 

Against this background, BlackRock has recently launched its first suite of fixed maturity bond UCITS ETFs that can be easily identified and analyzed through Trackinsight’s granular Fixed Income Classification implemented across Trackinsight’s proprietary database. 

iBonds ETFs behave similarly to bonds, trade like a stock, and mature on a defined date while benefitting from the diversification, transparency, and liquidity of ETFs. More specifically, the iBonds UCITS ETF lineup provides access to investment grade corporate bonds across various countries and industries, each with a specified maturity date. The fixed maturity nature of iBonds ETFs aims to offer investors clarity into their yield expectations and investment horizon. 

The two preset maturity dates are December 2026 and December 2028 with options for debt denominated in US dollars or Euros.

The four distributing share classes are as follows:

• iShares iBonds Dec 2026 Term $ Corp UCITS ETF (ID26)
• iShares iBonds Dec 2026 Term € Corp UCITS ETF (IB26)
• iShares iBonds Dec 2028 Term $ Corp UCITS ETF (ID28)
• iShares iBonds Dec 2028 Term € Corp UCITS ETF (IB28)

IB26 and IB28 currently have yields to maturity of 4.06% and 4.08% respectively, as of 18 August, while ID26 and ID28 have yields of 5.59% and 5.54%. 

The two following share classes are also available for investors who favor accumulating dividend policies:

• iShares iBonds Dec 2026 Term $ Corp UCITS ETF (26ID)
• iShares iBonds Dec 2028 Term $ Corp UCITS ETF (28ID)

This ETF suite tracks the Bloomberg MSCI Corporate ESG Screened index family and falls under the Article 8 classification (SFDR).

For more details, iShares iBonds UCITS ETF range is accessible through the Trackinsight screener here or in the Fixed Income Investing Channel, using the following filters:

• Investment purpose: Corporate
• Bond Type: Fixed Rate
• Credit Rating: Investment Grade
• Maturity: 1-5 years
• Provider: iShares