iShares chooses Deutsche Börse for credit ETF

iShares plans to list Europe’s first corporate bond ETF on further exchanges, in line with demand.

Europe’s first corporate bond exchange-traded fund (ETF) has hit the German market. iShares, the ETF operation of Barclays Global Investors (BGI), has launched iBoxx *Liquid Corporates with E750m of capital. Head of fixed income BGI Europe, Partha Dasgupta, said the product would provide investors with exposure to 40 different investment grade bonds. But unlike investing in a traditional portfolio of credits, diversification would be achieved with the simplicity and liquidity of a single trade. The new product is based on the iBoxx *Liquid Index, which has been created by seven investment banks, including Morgan Stanley, and the Deutsche Börse. The banks regularly send bond prices to the exchange, which works out averages, facilitating real-time pricing transparency and hence the creation of an ETF. Mr Dasgupta said the ETF would be listed in London within the next two months and on further exchanges in line with demand. He said the product should be nearing E2bn in assets by year-end. Further fixed income ETFs are planned, including a sterling product and possibly a high yield vehicle. iShares recently listed it’s first ETF on the the Borsa Italiana, the S&P 500 Fund.