BlackRock, Inc. (NYSE: BLK) has expanded its suite of target maturity ETFs with the launch of the iShares® iBonds®. The new fund joins iBonds 2016-2023 Corporate and Corporate ex-Financials ETF series, which launched in 2013.
iBonds are term maturity ETFs that are designed to provide monthly income distributions and a principal repayment at expiration. iBonds can be used in many of the same portfolio applications as individual bonds.
The ETF structure provides the added benefits of diversification, professional management, exchange traded flexibility, and price transparency.
For investors who are concerned about rising rates, the interest rate sensitivity of the iBonds Corporate Term ETFs will decline through time as the funds approach maturity. If iBonds are held until maturity, investors can expect to experience a yield that is similar to the yield to maturity of the underlying bonds held in the ETF.
iBonds can be utilized to target and manage interest rate risk, just like with a portfolio of individual bonds. Investors can also construct a bond ladder using iBonds to help achieve a well-diversified portfolio for investments of almost any size.
As of July 31 2014, iSharesBonds® Corporate ETFs, iSharesBonds Corporate ex-Financial ETFs and iShares Muni Term Maturity ETFs were joined under a single brand, iBonds® ETFs .
The iBonds suite now includes seven Corporate, four Corporate ex-financials, and six Muni term maturity ETFs.