iShares JP Morgan $ EM Bond EUR Hedged Ucits ETF offers exposure to dollar-denominated sovereign and quasi-sovereign bonds from emerging market countries.
The index it tracks – JP Morgan Emerging Markets Bond Index Global Core Index (EUR hedged) – includes only bonds with a minimum remaining time to maturity of two years at inclusion, and a minimum $1bn outstanding.
The physically-replicated fund follows a static monthly hedging index methodology with dollar exposure hedged back into euros using one month currency forwards. It has a total expense ratio of 0.5%.
Just last month, iShares launched its new currency-hedged fixed income range, including Global High Yield Corp Bond GBP Hedged and Global Corporate Bond EUR Hedged Ucits ETFs.
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.
“This new fund, with its robust hedging methodology, helps ETF investors separate and control currency risk without having to self-manage a currency overlay program or separate currency hedges.”
Merrill Lynch’s latest European Fund Manager survey, released last month, found that sentiment and allocations towards emerging markets have dropped to their lowest since 2008.
