BlackRock Australia has announced its intent to launch the iShares 20+ Year U.S. Treasury Bond ETF (AUD Hedged) (ASX: ULTB) with a management fee of 0.15%. This latest addition extends the local iShares fixed income range, offering Australian advisers and investors more precise fixed income investment options for their portfolio.
The iShares 20+ Year U.S. Treasury Bond ETF (AUD Hedged) (ASX: ULTB) aims to provide Australian advisers and investors with targeted exposure to long-end U.S. Treasury bonds. Australian investors may consider ULTB for portfolio diversification, as adding duration can provide defence against potential market volatility and during periods of slowing growth. Benchmarked to the ICE US Treasury 20+Year Bond AUD Hedged index, ULTB represents the longest duration exposure available within the locally listed iShares product range.
ULTB is expected to list on the ASX in early September.
James Waterworth, Director, Wealth Distribution, BlackRock Australasia said, “We have added ULTB to our local iShares product range, responding to Australian advisers and investor demand for more choice when it comes to precise fixed income exposures.
Also read: Channel Capital launches European Private Credit Fund
“Bond yields globally are at decade-highs, and if inflation indicators continue to fall, central banks may proceed to cut official cash rates. We believe investors have a window of opportunity to move out of cash and into fixed income exposures to lock in these higher yields, because the market has tended to price in changes to cash rates well before they occur.
“This could be achieved by long-end bond exposures like ULTB, which enable Australian investors to add duration in a simple and low-cost way. Alongside our Australian long duration government bond exposure ALTB, we now offer investors one of the broadest ranges of Australian-listed fixed income and cash ETFs available to build a well-diversified fixed income allocation in their portfolios.”
Tamara Stats, iShares and Index Investments Specialist, BlackRock Australasia said, “BlackRock is pleased to now offer access to long-end U.S. Treasury bond exposures, like ULTB, to Australian portfolio builders and investors, bringing one of its flagship exposures to the Australian market.
“U.S. 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.”
