BlackRock today announced that the iShares USD Bond Factor
ETF (NASDAQ: USBF) began trading. The ETF offers investors a
chance to outperform the broader U.S. fixed income market by
selecting bonds based on macro and quality and value style factor
insights. USBF, which seeks to track the BlackRock USD Bond Factor
Index, has an expense ratio of 0.18%, or $1.80 for every $1,000
invested –lower than 86% of mutual funds and ETFs in the
Morningstar Core Bond category.1
Many debt market participants are seeking to navigate credit
risk – the ability to be repaid in full and on time – and interest
rate risk, given how yields could rise after not only recent
all-time lows, but also four consecutive decades of declines. By
applying a rules-based, transparent factor, or “smart beta,”
investing lens to bonds, USBF pursues a strategy that seeks to
provide a diversified selection of U.S. dollar-denominated bonds
while enhancing total return relative to the broader U.S. fixed
income market and retaining similar risk characteristics.
“Historically low yields heighten the importance of broadening
potential sources of fixed income returns,” said Karen Schenone,
Head of iShares US Fixed Income Strategy within BlackRock's Global
Fixed Income Group. “USBF follows an index that systematically
looks at all types of bonds – investment grade corporate debt,
Treasuries, high-yield bonds and mortgage-backed securities – to
adjust its holdings based on various risk-on and risk-off
macroeconomic environments, offering an opportunity to place a
dynamic bond allocation at the core of your portfolio.”
Factors, like value, momentum, quality, and low volatility, have
historically driven both investment risk and returns for asset
classes like stocks and bonds.
“Using macro and style factors for U.S. core fixed income assets
can provide distinct and complementary sources of returns,” said
Andrew Ang, Head of Factor Investing Strategies at
BlackRock. “Leveraging the powerful technology of BlackRock’s
Systematic Fixed Income platform, USBF’s investment strategy
harvests the value factor to identify underpriced securities, while
using the quality factor to uncover the investment grade and
high-yield corporate bonds that exhibit lower probabilities of
default. We believe this can be a possible winning alternative to
broad-based debt market exposures.”
iShares ETFs like USBF enable access to factor-based strategies
in a transparent and cost-effective way. To learn more, please
visit here.
About BlackRock
BlackRock’s purpose is to help more and more people experience
financial well-being. As a fiduciary to investors and a leading
provider of financial technology, we help millions of people build
savings that serve them throughout their lives by making investing
easier and more affordable. For additional information on
BlackRock, please visit www.blackrock.com/corporate | Twitter:
@blackrock | LinkedIn: www.linkedin.com/company/blackrock
About iShares
iShares unlocks opportunity across markets to meet the evolving
needs of investors. With more than twenty years of experience, a
global line-up of 900+ exchange traded funds (ETFs) and $3.04
trillion in assets under management as of September 30, 2021,
iShares continues to drive progress for the financial industry.
iShares funds are powered by the expert portfolio and risk
management of BlackRock.
Carefully consider the Funds' investment objectives, risk
factors, and charges and expenses before investing. This and other
information can be found in the Funds' prospectuses or, if
available, the summary prospectuses which may be obtained by
visiting www.iShares.com or www.blackrock.com. Read the prospectus
carefully before investing.
Investing involves risk, including possible loss of
principal.
Fixed income risks include interest-rate and credit risk.
Typically, when interest rates rise, there is a corresponding
decline in bond values. Credit risk refers to the possibility that
the bond issuer will not be able to make principal and interest
payments. Non-investment-grade debt securities (high-yield/junk
bonds) may be subject to greater market fluctuations, risk of
default or loss of income and principal than higher-rated
securities. Mortgage-backed securities ("MBS") and commercial
mortgage-backed securities ("CMBS") are subject to prepayment and
extension risk and therefore react differently to changes in
interest rates than other bonds. Small movements in interest rates
may quickly and significantly reduce the value of certain
mortgage-backed securities.
There can be no assurance that performance will be enhanced or
risk will be reduced for funds that seek to provide exposure to
certain quantitative investment characteristics ("factors").
Exposure to such investment factors may detract from performance in
some market environments, perhaps for extended periods. In such
circumstances, a fund may seek to maintain exposure to the targeted
investment factors and not adjust to target different factors,
which could result in losses.
Diversification and asset allocation may not protect against
market risk or loss of principal. Buying and selling shares of ETFs
may result in brokerage commissions. There can be no assurance that
an active trading market for shares of an ETF will develop or be
maintained. Buying and selling shares of ETFs may result in
brokerage commissions.
Prepared by BlackRock Investments, LLC, member FINRA.
This information should not be relied upon as research,
investment advice, or a recommendation regarding any products,
strategies, or any security in particular. This material is
strictly for illustrative, educational, or informational purposes
and is subject to change.
The iShares Funds are not sponsored, endorsed, issued, sold or
promoted by BlackRock Index Services, LLC., nor does this company
make any representation regarding the advisability of investing in
the Funds. BlackRock Investments, LLC and BlackRock Index Services
are affiliates.
©2021 BlackRock, Inc. All rights reserved. iSHARES and
BLACKROCK are trademarks of BlackRock, Inc., or its
subsidiaries in the United States and elsewhere. All other marks
are the property of their respective owners.
1 Morningstar as of 9/30/2021
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version on businesswire.com: https://www.businesswire.com/news/home/20211014005344/en/
Luke Shane Luke.Shane@BlackRock.com 646.592.1672
Federico Serrano Federico.Serrano@BlackRock.com
646.352.2218
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