Published October 26, 2012
BlackRock's (BLK) iShares unit, the world's largest ETF issuer, has filed plans with the Securities and Exchange Commission to possibly introduce a new corporate bond ETF that would exclude debt issued by financial services firms.
The new ETF, the iShares Corporate Bond Fund, will track an index that includes U.S. dollar-denominated, investment-grade securities publicly issued by U.S. and non-U.S. issuers, that have $250 million or more of outstanding face value at the time of inclusion, according to the SEC filing.
Bonds must be rated at least Baa3 by Moody's Investors Service to be included. The filing did not contain or expense ratio.
The iShares iBoxx $ Investment Grade Corporate Bond Fund (LQD) is the largest corporate bond ETF with almost $25.3 billion in assets under management, but 34.4 percent of LQD's weight is allocated to financial services firms.
The ex-financials strategy has been popular with investors in other income-generating ETFs. The Market Vectors Preferred Securities ex Financials ETF (PFXF) has attracted almost $83 million in AUM since debuting in July while the WisdomTree Dividend ex-Financials Fund (DTN) has almost $1.12 billion in AUM.
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