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Access markets on demand with bond ETFs

Regulatory and structural shifts have made trading bonds more difficult in recent years. Institutional investors are increasingly turning to bond ETFs for liquid, low-cost bond exposure without the structural challenges of the over-the-counter market.

The benefits of bond ETFs

  • Simple: Gain diversified access to broad and targeted bond exposures in a single-trade.
  • Liquid: On-exchange trading of bond ETFs is independent of the cash bond market and can act as an additional source of liquidity.
  • Efficient: Compared to transacting in individual bonds, bond ETFs can offer significant trade cost savings.

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Find the bond ETF that fits your investment objective

iShares bond ETFs offer comprehensive coverage across the yield curve. Use this interactive chart to find bond ETFs across asset classes, yield, and duration.

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Ticker Name Sub Asset Class aladdinStrategyCode Strategy Net Assets YTD Return (%) Inception Date Net Expense
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Ticker Name Sub Asset Class aladdinStrategyCode Strategy Net Assets YTD Return (%) Inception Date Net Expense
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Ticker Name As Of YTD (%) 1Y (%) 5Y (%) 10Y (%) Incept (%) Gross Expense
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Ticker Name As Of YTD (%) 1Y (%) 5Y (%) 10Y (%) Incept (%) Gross Expense
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Ticker Name As Of YTD (%) 1Y (%) 5Y (%) 10Y (%) Incept (%) Gross Expense
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Ticker Name As Of YTD (%) 1Y (%) 5Y (%) 10Y (%) Incept (%) Gross Expense
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Net Expense
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Ticker Name As Of YTD (%) 1Y (%) 5Y (%) 10Y (%) Incept (%) Gross Expense
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Net Expense
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Ticker Name As Of YTD (%) 1Y (%) 5Y (%) 10Y (%) Incept (%) Gross Expense
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Net Expense
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Ticker Name As Of YTD (%) 1Y (%) 5Y (%) 10Y (%) Incept (%) Gross Expense
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Net Expense
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Ticker Name As Of YTD (%) 1Y (%) 5Y (%) 10Y (%) Incept (%) Gross Expense
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Net Expense
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Ticker Name 12 Month
Yield (%)
  30 Day
SEC Yield (%)
  Unsubsidized Yield (%)   Distribution
Yield
  Effective
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Ticker Name 12 Month
Yield (%)
  30 Day
SEC Yield (%)
  Unsubsidized Yield (%)   Distribution
Yield
  Effective
Duration
  Average
Yield
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ETFs are frequently used as tactical trading tools because they provide investors with the ability to gain exposure in a timely, cost-effective and efficient manner. ETFs make it possible to express broad-based sector views quickly while limiting idiosyncratic and unintended curve risks.

In this example, an investors takes a view on high yield bonds by opening a position in the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) when credit spreads are wide. The manager closes the position when they tighten.

Trade credit spreads with an ETF

Trade credit spreads with an ETF

Source: Bloomberg, as of 6/30/16. For illustrative purposes only. Not meant to be investment advice.

Constructing a diversified bond portfolio, accessing niche sectors with limited trading resources or investing a significant inflow of cash into an existing portfolio may present challenges.

When gaining exposure to a specific sector is difficult, investors may benefit from using ETFs to help complete an asset allocation or access new market segments.

ETFs can be used for portfolio completion

ETFs can be used for portfolio completion

For illustrative purposes only.

Cash flows into and out of a portfolio can disrupt performance. Challenges may arise when assets need to be liquidated during difficult market conditions to meet a withdrawal. Conversely, large cash inflows may sometimes result in excess cash positions when managers face delays in sourcing bonds.

ETFs can be added to portfolios to provide an additional liquidity layer, acting as a buffer to help manage inflows and outflows, while providing a way to manage market exposure.

Portfolio funding options to fulfill a large redemption

Portfolio funding options to fulfill a large redemption

For illustrative purposes only.

Contact the dedicated iShares institutional team

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