BlackRock has extended its fixed income ETF range with the launch of a floating rate bond fund, intended to defend against rising interest rates.
The iShares $ Floating Rate Bond Ucits ETF (FLOT) offers exposure to US dollar denominated floating rate bonds.
the fund will hold securities rated investment grade or higher with a maximum maturity of five years, and has a total expense ratio of 0.1%.
'Concerns about rising rates have prompted many investors to consider moving out of longer-duration bonds, this fund provides investors with a way to reduce duration and protect portfolios against periods of rising interest rates,' said Brett Pybus, head of iShares EMEA fixed income strategy at BlackRock.
'The fund provides investors with exposure to short-dated, high quality floating rate credit denominated in US dollars and offers an attractive yield compared with money market funds.'