BlackRock Australia has announced the launch of the iShares 15+ Year Australian Government Bond ETF (ASX: ALTB) in a bid to expand the firm’s iShares product suite in Australia.
Namely, ALTB is designed to provide Australian investors with targeted exposure to long-duration Australian Treasury and semi-government bonds. The fund has a management fee of 0.15 per cent.
Clarifying how investors and advisers may utilise ALTB, BlackRock said the fund can be considered for portfolio diversification as long-duration bonds can typically serve as a hedge during equity market downturns.
Benchmarked to the Bloomberg AusBond Govt 15+ Year Index, ALTB is also the longest duration exposure available within the Australian iShares product range.
“With the introduction of ALTB, BlackRock is expanding its local iShares product range to provide Australian advisers and investors with more precise fixed income exposures,” BlackRock Australasia head of wealth Chantal Giles said.
“We expect ALTB to be a complementary exposure for advisers and clients looking to access a high-quality diversification option that will add defensive benefits to their whole portfolios,” Giles continued.
She further highlighted that the transparency, liquidity, and portfolio efficiency of the bond ETF structure also allows for precise allocation between Australian and global interest rate regimes.
iShares and index investments specialist Tamara Stats added that, with interest rates expected to remain higher for longer in Australia, multi-asset investors should consider adding more specific parts of the yield curve within their fixed income allocations.
“The addition of a long-duration exposure like ALTB can be particularly relevant for those positioning for lower term rates,” Stats said.
“ALTB offers exposure to a portfolio of long-duration AAA-rated bonds, which have a track record of performing well when there’s an anticipation of falling Australian interest rates. With a yield between 4.5–5 per cent so far this year, the Bloomberg AusBond 15+ Year Index also offers a regular source of income for investors.”
ALTB is the latest fund to join BlackRock’s local product suite this year, the firm having only announced its intention to launch its Emerging Markets ex China ETF (EMXC) earlier this week.
According to the global investment manager, EMXC will be made available on the ASX later in June.
In February, BlackRock also launched three more ETFs to help investors access their preferred investment style in line with their broader objectives in a low-cost way.
The funds – iShares MSCI World ex Australia Momentum ETF (IMTM), iShares MSCI World ex Australia Value ETF (IVLU), and iShares MSCI World ex Australia Quality ETF (IQLT) – are now available on Cboe, marking the inaugural iShares products to be listed on the exchange in Australia.
