On Friday, BlackRock rolled out its newest pair of iShares ETFs. These funds are the iShares iBonds Dec 2034 Term Corporate ETF and the iShares iBonds Oct 2034 Term TIPS ETF.
Corporate Bond Portfolio
IBDZ aims to track the investment results of the Bloomberg December 2034 Maturity Corporate Index. This index holds investment-grade corporate bonds that are U.S. dollar denominated and reach maturity in 2034.
As a term fund, IBDZ will terminate around December 15 2034, and will provide the remaining net assets to shareholders. The fund has a net expense ratio of 0.10%.
The fund invests a wide majority of assets toward components within the underlying index. Additionally, it may allocate investments toward other ETFs, short-term paper, U.S. government securities, and cash or cash equivalents.
Targeting TIPS
Meanwhile, IBIK presents investors with access to a portfolio of inflation-protected U.S. Treasury bonds (TIPS). It aims to track the results of the ICE 2034 Maturity US Inflation-Linked Treasury Index, which consists of TIPS scheduled to mature during 2034.
Like IBDZ, IBIK has a net expense ratio of 0.10%. Additionally, IBIK is also a term fund, scheduled to terminate and distribute remaining net assets around October 15, 2034.
While the wide majority of fund assets will be invested in index components, IBIK may also invest a smaller portion in futures, options, and swaps contracts. By investing in TIPS, the fund can provide investors with a degree of inflation protection.
To achieve investment objectives, both funds use a representative sampling indexing strategy. While indexing may mitigate the funds’ abilities to outperform their indexes, the approach can be beneficial for risk management purposes.
“Advisors are increasingly looking for sharper tools to help their clients pinpoint exposure to specific maturities and credit quality. It’s great to see BlackRock expand its already powerful fixed income franchise with more targeted offerings,” noted Vettafi Senior Industry Analyst Kirsten Chang.
These two iShares ETFs join BlackRock’s ever-growing lineup of more than 400 ETFs listed in the United States. BlackRock’s ETFs currently have over $2.8 trillion in assets under management.
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