BlackRock on Sept. 21 said it has expanded its iShares iBonds ETF franchise with the addition of what it says are the industry's first TIPS defined maturity bond ETFs.
The TIPS iBonds ETF suite is made up of 10 funds that invest in U.S. Treasury Inflation-Protected Securities with maturities ranging from 2024 to 2033, BlackRock, the world's largest asset manager, said in a news release.
"The TIPS iBonds ETF suite provides advisors a new way to navigate this higher for longer rate environment while simultaneously providing investors a way to manage inflation risk and access yield," said Karen Veraa, head of U.S. iShares fixed income strategy at BlackRock, in the release.
The 10 new ETFs each have expense ratios of 0.10%, according to the release. Five of the new funds were listed on the NYSE Arca exchange last week, while the remaining five were listed this week, a BlackRock spokesperson confirmed.
"BlackRock has a strong suite of target maturity ETFs to help advisors and clients manage their duration," Todd Rosenbluth, head of research at VettaFi, a data and analytics provider, said in written comments. "Interest rate sensitivity remains important given the Fed's plans to keep rates high into 2024."
The new funds join "a lineup of established target maturity ETFs that includes the corporate bond-focused iShares iBonds Dec 2024 Term Corporate ETF (IBDP) and the muni-focused iShares iBonds Dec 2024 Term Muni Bond ETF (IBMM)," Rosenbluth said.
BlackRock in 2010 pioneered defined maturity bond ETFs with the launch of its first iBonds ETFs, according to the release, which said iBonds ETFs hold diverse bonds with matching maturity dates. Each fund provides regular interest payments and distributes a final payout in its stated maturity year, the release said.
The iBonds ETF franchise, which has assets under management totaling $23 billion, "spans several asset classes, including U.S. Treasuries, municipals, investment grade, high yield, and now, TIPS," the release said.
As of June 30, BlackRock had $9.43 trillion in total assets under management.
