BlackRock has expanded its fixed-income ETF range, with a fund designed as a ‘building block’ for Australian advisers.
The iShares Core Global Aggregate Bond (AUD Hedged) ETF (AGGG) will invest in investment-grade global bonds, including government, securitised, and investment-grade corporate bonds across multiple regions.
Benchmarked to the Bloomberg Global Aggregate Bond Index (AUD Hedged) index, it is expected to list on the ASX in early November 2025, with a management fee of 0.18 per cent per annum.
“It enables Australian advisers and investors to diversify their fixed income exposure across countries and sectors, with the added benefit of AUD hedging to help mitigate currency fluctuations,” the asset manager said.
Globally, BlackRock manages over US$1 trillion in fixed-income ETFs, and the asset type has been flagged by commentators as a sector set to see strong ETF growth in product development over the next five years.
Steve Ead, head of global product solutions for Australasia, said: “Fixed income ETFs continue to play an important role in portfolio construction, particularly in an environment where investors are seeking global diversification and income.
“AGGG offers a simple, cost-effective way to access global investment grade bonds, complementing our existing suite of iShares fixed income ETFs in Australia and serves as a tool for advisers and asset allocators to help build diversified multi-asset portfolios.”
Katherine Palmer, head of fixed income and credit product strategy for Australia, said: “The proportion of fixed income assets yielding over 4 per cent have increased markedly since 2021, with investors now able to access a more interesting array of yields across different fixed income sub-categories – including the investment grade space.”
In the three months to 30 September, the US asset manager said flows were particularly strong into its iShares ETFs at US$153 billion, with assets under management (AUM) in this division now standing at US$5 trillion. Core equity ETFs saw the highest volume of inflows at US$53 billion, followed by fixed-income ones, which gained US$41 billion.
In Australia, iShares ETFs crossed $50 billion AUM, reflecting the confidence Australian advisers and investors place in ETFs as core portfolio building blocks. It noted ETF innovation is leading the way, with the development of new types of products focused on fixed income, active products, and digital strategies.
