BlackRock has launched Europe’s first ETF for US mortgage backed securities.
The asset manager has launched the iShares US Mortgage Backed Securities Ucits ETF. The ETF uses the underlying Barclays US MBS index, which is based on individual fixed rate pools, to ensure diverse holdings.
The fund will invest in AAA-rated mortgage-backed securities issued by three agencies backed by the US government.
The ETF has a total expense ratio of 0.28 per cent, and will physically replicate the index.
Brett Olson, head of iShares EMEA fixed income, says: “This is a part of the bond market that European Ucits investors previously haven’t had access to through an ETF … and represents yet another tool that investors can use to diversify their bond exposures in a liquid and transparent way.”
Olson adds that the fund is ideal for investors who want exposure to the US housing market, but it does not invest in sub-prime mortgages.