Global investment manager BlackRock is set to launch a low-cost United States Treasury bond exchange-traded fund (ETF) in Australia later this month, granting local investors the opportunity to tap into some of the world’s most liquid securities.
The iShares US Treasury Bond ETF (IUSG) will track the ICE US Treasury Core Bond Australian Dollar Hedged Index and will be priced at 15 basis points, which, according to BlackRock, is 25 per cent cheaper than the nearest competing ETF in Australia.
Through the fund, local investors will gain exposure to a portfolio of bonds issued by the US government, ranging from one-to-30-year maturities.
BlackRock Australasia head of wealth Chantal Giles said the move to introduce the ETF was part of ongoing plans to offer Australian financial advisers and investors more access to the global bond market on the local exchange.
“Australian investors are increasingly using fixed income ETFs as important tools to help navigate market uncertainty and to take advantage of the highest yields seen in years,” Giles said.
“Today’s announcement will ensure they have affordable and efficient access to a portfolio of US Treasuries that are among the most liquid securities in the world.”
BlackRock Australasia iShares ETF and index investments specialist Tamara Stats noted the introduction of the ETF would provide an additional option for those investors seeking portfolio diversification.
“Australian advisers and investors can consider adding US Treasuries alongside Australian Treasuries as an additional portfolio diversification tool. US Treasury exposure also gives investors access to an income stream, presently at multi-year highs,” Stats said.
“As the pioneer of bond ETFs globally, we are pleased that the upcoming addition to our local iShares product suite will enable us to offer more fixed income ETFs to Australian advisers and investors than any other issuer in the market.”