The new iShares Barclays Capital Asia Local Currency Bond Index ETF and iShares JPMorgan USD Asia Credit Bond Index ETF are also the first fixed income ETFs offering multi-market Asian coverage to be listed on the Singapore Exchange (SGX).
The new products offer broad market access to large baskets of Asian sovereign, quasi-sovereign and corporate bonds in one trade during exchange dealing hours. These are cash-based ETFs which invest directly in the underlying bonds, so offer investors the maximum transparency.
Said Catherine Barker, head of iShares in South-east Asia: “Asian investors know their region and understand the strong case for owning its debt in a liquid, transparent and tradable form. Asian bond markets offer an attractive risk / reward proposition.”
Added Barker: “There is a lack of granularity in the current exposures which investors can get access to in the fixed income space.”
The new iShares ETFs therefore satisfy investors’ desires for enhanced yield through the use of products with solid credit foundations.
At the same time, said Barker, the power of bringing fixed income into a portfolio is, ultimately, diversification. “This enables investors to get better risk-adjusted returns.”
Added Sutat Chew, head of securities at SGX: “With these listings, our customers can benefit from further diversity in the ETF suite and more choices in terms of local and regional fixed income products.”
At the same time, iShares is continuing to work with various industry players to educate end-clients about the applications of ETFs in portfolio, added Barker.