BlackRock Unveils New iShares iBonds ETFs For Fixed-Income Investors

BlackRock Inc (BLK) broadened its fixed-income lineup with two new target maturity ETFs.

The iShares iBonds Dec 2035 Term Corporate ETF (IBCA) and the iShares iBonds Oct 2035 Term TIPS ETF (IBIL) blend the features of conventional bonds with the convenience of stock-like trading.

Both IBCA and IBIL, which launched Wednesday, can be useful parts of a bond ladder strategy. This approach involves holding bond ETFs with various maturity dates so that investors can control interest rate risk and continue to earn a steady income.

When the bonds mature, investors can reinvest in new ones, with the potential advantage of higher interest rates. This flexibility renders target maturity ETFs a sensible option for those who wish to manage risk versus return in shifting market conditions.

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IBCA monitors and replicates the Bloomberg December 2035 Maturity Corporate Index but can also hold U.S. government securities, short-term paper, cash or cash equivalents, and money market funds. Under its prospectus, IBCA will liquidate on about December 15, 2035.

At its launch, IBCA’s portfolio concentrated on consumer goods and services and energy companies. It is a strong option for investors wanting long-term corporate bond exposure with a specific maturity date.

IBIL, on the other hand, is designed for investors who want protection against inflation. It tracks the ICE 2035 Maturity US Inflation-Linked Treasury Index, which is comprised of inflation-indexed U.S. Treasury securities due in 2035.

The majority of IBIL assets are invested in the index’s component securities, although at most 10% may be invested in options, futures, and swap agreements. The fund will expire around October 15, 2035, for a disciplined approach to inflation-protection investing.

BlackRock (BLK) portfolio managers James Mauro and Karen Uyehara oversee IBC and IBIL. Both funds have a low-cost ratio of 0.10%.

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