BlackRock has launched the iShares iBonds Dec 2032 Term Corporate ETF (NYSE Arca: IBDX), which begins trading today on the NYSE Ara Exchange.
The fund seeks to track the investment results of an index composed of 225 U.S. dollar-denominated, investment-grade corporate bonds maturing in 2032. With IBDX, investors can combine the defined maturity and regular income distribution characteristics of a bond with the transparency and tradability of a stock.
“This is great for a financial advisor that knows they’d like to buy bonds in this calendar year but don’t have to do the security selections themselves,” said Karen Veera, head of iShares fixed-income strategy within BlackRock’s global fixed income group. “It’s designed to mature like a bond, it can trade like a stock, and it’s diversified like a fund.”
Veera added that the ETF could also be used for bond laddering, which is the practice of buying bonds that mature in consecutive calendar years and then reinvesting proceeds from bond maturities into new bonds that extend out the ladder.
“This is a great way for financial advisors to offer bond ladders to their clients at scale,” said Veera, noting that laddering is a “well-known bond strategy that people utilize.”
IBDX has an expense ratio of 0.1%.
For more information about these funds, visit iShares.
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