iShares unveils short-dated corporate bond ETF

iShares has launched an ETF providing exposure to short-dated corporate bonds denominated in sterling on the London Stock Exchange.

The iShares Markit iBoxx £ Corporate Bond 1-5 is physically-backed, investing in the underlying bonds comprising the Markit index.

The fund is optimised, meaning it selectively invests in the corporate bonds to enhance liquidity.

Axel Lomholt, head of product development for iShares EMEA, says: "With UK interest rates likely to rise from their all time low this year, an increasing number of investors are looking to manage their exposure to interest rate risk."

He says investors can use the ETF to lower the overall duration of their fixed income portfolio in a rising yield environment, as shorter maturity corporate bonds are generally less sensitive to changes in yields.

The latest ETF complements the firm's existing iShares Markit iBoxx £ Corporate Bond ex-Financials and iShares Markit iBoxx £ Corporate Bond funds, boosting the iShares fixed income range to 42 products.