BlackRock, Inc. (NYSE:BLK) announced that its iShares® Exchange Traded Funds (ETFs) business, the world's largest manager of ETFs, has launched a new fund focused on corporate bonds in emerging market countries. The iShares Emerging Markets Corporate Bond Fund (BATS: CEMB) offers broad access to dollar-denominated , investment grade and high yield bonds issued by corporations based in Latin America, Eastern Europe, the Middle East, Africa and Asia. An Irish-domiciled fund with the same exposure listed earlier today on the London Stock Exchange.
The iShares Emerging Markets Corporate Bond Fund is the first index-based ETF to offer targeted exposure to emerging markets corporate debt. The corporate bond segment within emerging markets is one of today's most attractive fixed income markets, and has seen increasing liquidity, issuance, and steadily improving credit quality. The emerging markets corporate debt market saw an eight-fold increase in issuance in the last ten years, and now rivals the size of the dollar-denominated emerging markets sovereign debt market 1.
“Investors are becoming more sophisticated in how they build fixed income portfolios,” said Matthew Tucker, Head of iShares Fixed Income Strategy at BlackRock. “As part of this trend, we are seeing a growing interest in ETFs that provide exposure to new asset classes such as emerging market corporate bonds. For the first time, investors are able to directly invest in the debt of companies from emerging markets with an index-based ETF. Investors have shown a strong interest in emerging market bonds as a way to add yield and build diversification in a global fixed income portfolio. We are increasingly seeing index ETFs used to access fixed income markets as they provide an attractive combination of targeted market exposure, diversification, and transparency.”
Tucker continued, “iShares has been a pioneer in creating index ETFs that allow investors to access new markets across the globe. Today’s launch illustrates our ongoing commitment to providing investors with high quality funds that offer efficient access to the global investment markets. Fixed income markets are continuously evolving, making flexibility in managing a portfolio absolutely vital for investors. Bringing these kinds of unique investment tools to investors is the core principle driving product innovation at iShares.”
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