BlackRock expands fixed income offering with floating rate bond ETF

TER of 0.10%

BlackRock has launched a floating rate bond ETF, the iShares $ Floating Rate Bond UCITS ETF, designed to protect investors against rising interest rates.

The ETF will gain exposure to US dollar denominated floating rate bonds whose coupons adjust to reflect any changes in interest rates, whereas traditional bonds pay fixed coupons. Bonds in the underlying index are rated investment grade or higher and have a maximum maturity of five years. Last month, the Federal Reserve raised rates by 0.25%, while indicating plans to hike once more this year, and floating rate bonds are a way for investors to mitigate the risks of rising interest rates. Physically replicated, the ETF has a total expense ratio (TER) of 0.10%. How five big US equ...