IGSB Profile
The iShares 1-5 Year Investment Grade Corporate Bond ETF aims to offer investors exposure to short-term, high-quality corporate bonds with investment-grade ratings. Managed by BlackRock Fund Advisors (BFA), this fund targets investment-grade bonds with maturities ranging from one year to less than five years. The index it tracks includes bonds issued by both U.S. and international entities, all of which are U.S. dollar-denominated and publicly issued in the U.S. domestic market.
To ensure alignment with its benchmark, the fund commits to investing at least 80% of its assets in securities that are constituents of the underlying index. This strategy provides investors with a portfolio that closely mirrors the index's composition, capturing the performance of high-quality, short-term corporate bonds. Additionally, the fund allocates at least 90% of its assets to fixed income securities that resemble those in the index, according to BFA’s assessment, to enhance tracking precision.
The fund's investment approach includes a focus on managing interest rate risk and maintaining a low duration profile due to its short-term bond focus. This strategy aims to mitigate interest rate fluctuations that can impact bond prices, thus providing investors with relatively stable returns. To maintain a close tracking of the index, the fund may also utilize various financial instruments, including derivatives, but these are restricted to a small portion of the portfolio to ensure that the majority of assets are invested directly in bonds.
Designed for investors seeking stable income from short-term, investment-grade bonds, the ETF provides an effective tool for diversifying fixed income investments while managing interest rate risk. By focusing on bonds with shorter durations, the fund aims to offer lower volatility and a predictable income stream, appealing to those who prefer lower-risk, shorter-term fixed income exposure. The ETF combines rigorous tracking of the index with a conservative investment approach to deliver consistent and reliable performance.
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