iShares has expanded its fixed income range with the launch of the iShares Barclays Capital Emerging Market Local Govt Bond fund, listed on the London Stock Exchange.
The new iShares fund offers access to the fixed-rate debt of emerging market governments which is denominated in their local currencies. The fund invests in physical bonds and provides investors with diversified exposure to a sector which can be difficult and costly to capture directly
The iShares Barclays Capital Emerging Market Local Govt Bond fund extends iShares’ European fixed income range to 43 funds with a total of USD 30 billion in assets under management and complements the iShares JPMorgan $ Emerging Market Bond fund.
Many emerging market governments issue debt in two forms, US dollar denominations and local currency denominations, which have different yield and risk profiles. Axel Lomholt, head of product development for iShares EMEA said:
“We have seen sustained demand from investors for an effective way to access local currency emerging market bonds. Two reasons for this demand are the high yield of these bonds and the currency potential. Over the past two years, many of the emerging market currencies appreciated versus hard currencies like the US-Dollar, Euro or Sterling. Local currency bonds can be an effective way for investors to benefit from this appreciation.
“The iShares Barclays Capital Emerging Market Local Govt Bond fund meets this demand by providing investors with liquid and diversified exposure to the debt of eight emerging nations in a single trade.”
* IndexIQ launched what it claims is the first ETF dedicated to providing access to the small-cap US real estate sector: the IQ US Real Estate Small Cap ETF (NYSE Arca: ROOF).
ROOF will include exposure to a wide variety of small-cap Real Estate Investment Trusts (REITs), including Mortgage REITs, Retail REITs, and Office REITs.
As IndexIQ CEO Adam Patti notes, REITs took a hit at the start of the financial crisis, but since 2009 they have seen a recovery in performance, with small-cap REITs far outpacing the performance of their large-cap counterparts.
IndexIQ believes small-cap REITs can offer an income stream via dividend payouts and, as larger REITs look to acquisitions for growth, small-cap REITs are well-positioned to become attractive acquisition targets, potentially benefiting their investors. (www.indexiq.com)
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