iShares has filed for a fund that will be the international answer to its iShares Core U.S. Aggregate Bond ETF, as well as the main competitor of the Vanguard Total International Bond ETF.
The iShares International Aggregate Bond ETF will track the Barclays Global Aggregate ex USD 10% Issuer Capped (Hedged) Index, a currency-hedged index of nearly 8,000 non-USD investment-grade fixed-income securities issued in 55 developed and emerging countries.
The Vanguard Total International Bond ETF is the only fund of its kind at the moment; it also provides broad exposure to the non-U.S. investment-grade bond space with a currency hedge. It was launched in 2013 and has accumulated nearly US$ 3.5 billion in assets under management. When Vanguard launched the ETF along with an emerging markets bond ETF, there was a great deal of investor interest, as it was the first time that the fund provider had delved into the international fixed-income universe.
Since bond exchange traded funds were first launched in 2002, US-listed bond ETFs have grown to approximately US$ 320 billion in assets, becoming an increasingly important part of financial advisors’ portfolios due to their low cost, tax efficiency, and competitive performance.
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