BlackRock Australia has launched a new exchange-traded fund (ETF), providing exposure to long-duration Australian Treasury and semi-government bonds.
The asset manager has expanded its iShares product range with the introduction of its iShares 15+ Year Australian Government Bond ETF.
With a management fee of 0.15 per cent, the investment solution offers Australian investors and financial advisers with additional low-cost fixed income building blocks. It provides targeted exposure to long-duration Australian Treasury and semi-government bonds, which can serve as a hedge during equity market downturns.
The ETF is the longest duration exposure available within the Australian iShares product suite as it benchmarks the Bloomberg AusBond Government 15+ Year Index.
Chantal Giles, head of wealth at BlackRock Australasia, said the product aims to provide Australian advisers and investors with more precise fixed income exposures.
“We expect [the ETF] to be a complementary exposure for advisers and clients looking to access a high-quality diversification option that will add defensive benefits to their whole portfolios,” Giles described.
“The transparency, liquidity and portfolio efficiency of the bond ETF structure also allows for precise allocation between Australian and global interest rate regimes.”
Tamara Stats, iShares and index investments specialist at BlackRock Australasia, commented: “With interest rates expected to remain higher for longer in Australia, it is pertinent for multi-asset investors to consider adding more specific parts of the yield curve within their fixed income allocations.
“The addition of a long-duration exposure like [this ETF] can be particularly relevant for those positioning for lower term rates.”
With a yield of 4.5–5 per cent so far this year, the Bloomberg AusBond Government 15+ Year Index provides a regular source of income for investors, Stats added.
BlackRock’s iShares range offers more than 1,400 global ETFs with US$3.7 trillion in assets under management, as of 31 March 2024.
Earlier this month, the firm announced it intends to launch an emerging markets ex-China ETF to give advisers and investors greater diversification.
The iShares MSCI Emerging Markets ex China ETF (EMXC) will be available on the ASX in late June and have a management fee of 0.25 per cent. The fund aims to offer Australian investors a higher allocation to the emerging markets universe outside of China, providing the opportunity for greater global diversification.
