IShares, the ETFs arm of Barclays Global Investors, has launched two new fixed income ETFs, further expanding its product range and providing investors the opportunity to diversify their exposure to new markets.

The iShares Global Inflation-Linked Bond provides investors with exposure to the Barclays World Government Inflation-Linked Bond Index, and gives investors a degree of protection aginst global inflation in a single trade.

The index currently consists of 90 bonds representing 10 different countries and seven different currencies.

The second addition, the iShares € Covered Bond, provides investors with liquid exposure to a range of European covered bonds based on the Markit iBoxx € Covered index.

There are currently 448 bonds in the index, 93 per cent of which are AAA-rated, with an average annual yield of 5.25 per cent and duration of 4.25 years.

Alex Claringbull, senior fixed-income portfolio manager at iShares, says, ‘These new funds are ideally suited to today’s economic climate as investors return to safety in the face of volatile market conditions, and they offer this safety in the transparent, liquid and diversified structure of an ETF.'

‘Rising inflation is a major concern for investors, and we’re anticipating increased demand from investors for inflation-linked ETFs as they look to protect their investments from this pressure. IShares already has a strong range of inflation-linked products, and this global product complements our suite by providing investors the opportunity to invest in inflation-linked bonds from around the developed world in a single trade.’

According to Claringbull the covered bond market is the fourth biggest bond market in Europe after German, French and Italian sovereigns, and offers investors a high level of liquidity. Covered bonds also offer an attractive yield pick-up over sovereign, supranational and agency bonds.

He says, ‘The iShares € Covered Bond enables holders to invest into an increasingly important diversifying asset class without diluting the overall credit quality of their portfolio, and offers investors greater security as holders have a preferential claim on a legally segregated pool of collateral assets.’

For more information, visit www.ishares.com

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