BlackRock has launched Europe’s first euro-denominated emerging markets government bond ETF.
The iShares J.P. Morgan € EM Bond UCITS ETF (EB3M) is listed on the Deutsche Boerse with a total expense ratio (TER) of 0.35%.
EB3M tracks the J.P Morgan Euro EMBI Global Diversified index which has a basket of government bonds issued by sovereign and quasi-sovereign entities with at least two-and-a-half years to maturity at the time of inclusion.
BlackRock said it expects emerging market debt to play a bigger role in investor portfolios in 2021 with investors looking to ETFs for greater diversification amid a challenging period for traditional fixed income.
This has been reflected in the popularity of BlackRock’s iShares China CNY Bond UCITS ETF which has seen $1.7bn inflows year-to-date as at 6 April, according to data from ETFLogic, as investors continue their rotation away from western fixed income due to mounting inflationary fears.
BlackRock currently boasts the largest US dollar-denominated emerging market government bond ETF on the market, the $10.7bn iShares J.P. Morgan $ EM Bond UCITS ETF (SEMB).