BlackRock's (NYSE: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.
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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 (NYSE: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 (NYSE:PFXF) has attracted almost $83 million in AUM since debuting in July while the WisdomTree Dividend ex-Financials Fund (NYSE:DTN) has almost $1.12 billion in AUM.
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