BlackRock Australia has announced it intends to launch a US Treasury Bond ETF for Australian advisers and investors.
The iShares 20+ Year US Treasury Bond ETF (AUD Hedged), which has the ticker of ULTB, will have a management fee of 0.15 per cent and expands the available fixed income ETF range for Australian investors and advisers.
Benchmarked to the ICE US Treasury 20+Year Bond AUD Hedged index, it represents the longest duration exposure available within the locally listed iShares product range.
BlackRock said investors may consider the product for portfolio diversification, as adding duration can provide defence against potential market volatility and during periods of slowing growth.
Tamara Stats, iShares and index investment specialist, said: “US Treasury bonds are considered one of the highest quality assets due to their low level of default risk, offering defensive benefits to the broader portfolio. The historic inverse relationship between stocks and bonds has been challenged in recent years. As inflation starts to return to target, we may see the historic correlation restored. Therefore, ULTB could be a very useful tool for portfolio diversification.
“Hedged to the Australian dollar, ULTB also offers Australian investors an additional layer of stability without having to weather the ups and downs of foreign exchange risk.”
The fund is expected to list on the ASX in early September.
Earlier this year, the firm expanded its managed account suite with new active multi-asset model portfolios. Managed by BlackRock’s multi-asset strategies and solutions team, the active model portfolios are available to financial advisers and investors via the HUB24 platform.
They offer three risk profiles to meet investors’ personalised investment preferences and risk tolerance: balanced, growth and aggressive. Fees range from 0.74–0.85 per cent per annum across the risk profiles.
It blends both active and index strategies across several asset classes such as equities, fixed income, multi-asset, property, infrastructure, commodities and liquid alternatives.
