iShares, the exchange-traded funds (ETFs) platform of BlackRock, has added a euro-hedged emerging markets fixed income ETF to its currency-hedged products on the London Stock Exchange.
The newly launched iShares JP Morgan $ EM Bond EUR Hedged UCITS ETF (EMBE) offers investors euro currency-hedged exposure to dollar-denominated sovereign and quasi-sovereign bonds from emerging markets countries.
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The index it tracks – JP Morgan Emerging Markets Bond Index Global Core Index (EUR hedged)- includes bonds with a minimum remaining time to maturity of two years at inclusion, and a minimum US$1 billion outstanding.
The new fund which tracks via physically backed sample-based replication methodology has a total expense ratio of 0.50%.
The fund will follow a static monthly hedging index methodology with dollar exposure of the fund hedged back into euros that enables investors to reduce the impact of fluctuations between the portfolio’s base currency (euros) and the dollars.
Stephen Cohen, head of investment strategy at iShares EMEA said: "Investors are beginning to place more emphasis on mitigating the risk that currency exposure can introduce into a portfolio, especially during periods of heightened currency volatility.
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By GlobalData"This new fund, with its robust hedging methodology, helps ETF investors separate and control currency risk without having to self-manage a currency overlay programme or separate currency hedges," Cohen added.
