BlackRock(R) Canada Launches the iShares(R) DEX HYBrid Bond Index Fund
September 28 2010 - 7:18AM
Marketwired
BlackRock Asset Management Canada Limited (BlackRock Canada), an
indirect, wholly-owned subsidiary of BlackRock, Inc., today
announced that the iShares Exchange-Traded Funds (ETFs) business,
the world's largest provider of ETFs, launched the new iShares DEX
HYBrid Bond Index Fund (TSX: XHB), the first ETF in Canada to
invest in both high-yield and investment-grade corporate bonds.
XHB, which will begin trading on the Toronto Stock Exchange
today, is a unique vehicle designed to provide investors with
regular monthly income by investing in both BBB-rated corporate
bonds and the high-yield bond market. XHB will invest exclusively
in Canadian-dollar denominated securities.
"XHB is unique in Canada as the only ETF to give investors
exposure to the expanding Canadian high-yield marketplace.
Historically, we have had a relatively small high-yield market,
with most high-yield issuers looking to raise capital in the US.
However, over the last 18 months we have seen a number of new
high-yield issues within Canada, and the number of issuers is
expected to grow as the our marketplace becomes more established,"
said Oliver McMahon, Director of Product Management for iShares
ETFs at BlackRock Canada.
"XHB meets investor demand for a diversified, high-yielding
product, while it is designed to mitigate risk and deliver regular
distributions."
Like the other trusted iShares ETFs, XHB offers the benefit of
reasonable management fees (lower than many mutual funds) and the
convenience of an exchange listing and intra-day trading. Unlike
mutual funds, this means that investors can buy and sell throughout
the trading day, and realize the current market value of their
investments in real-time. They can also use value-added trading
strategies, such as limit and stop orders.
Why XHB Will Appeal to Investors
A recent study found that most investors say the experience of
the last two years has made them more cautious. In fact, preserving
initial capital has become a considerably greater priority to them.
Yet, not surprisingly, they also want to maximize their rates of
return, and they view income generation as a cornerstone of any
sound personal investment strategy.
On behalf of iShares ETFs, The Gandalf Group last month
interviewed a representative sample of individual Canadian
investors with more than $50,000 in the stock market, bonds, or
mutual funds. It found that 95% said that preserving their initial
investment and minimizing the risk of loss in their portfolio is a
priority right now. (Fully 62% reported that it was a very
important objective.) Still, at the same time, 89% of respondents
said that it was also important to maximize the potential for
increases in their holdings. And 73% stressed the importance of
income generation to their overall investment plan.
"Our research shows that a majority of people today believe it
is important to maximize the value of their investments and
generate regular income," said Oliver McMahon. "We expect all
investors to find XHB an attractive addition to an intelligently
created, balanced portfolio."
XHB's Unique Methodology
XHB will invest in both high-yield and BBB-rated
investment-grade corporate bonds and track a new and innovative
index from PC-Bond, a business unit of TSX Inc., the DEX HYBrid
Index (the "Index").
The Index will combine the full market capitalization of
eligible Canadian high-yield bonds (which typically pay higher
yields in order to compensate for greater credit risk) along with
30% of the market capitalization of the eligible BBB-rated
corporate bond market. While the Canadian high-yield market is
still nascent and relatively small, this innovative methodology
allows the Index to maintain a significant yet investible weight in
high yield-bonds. This diversification across ratings generates
high income without sacrificing the stability that bonds provide.
XHB will carry a management fee of only 0.45%.
As of August 31, 2010, there were 228 bonds included in the DEX
HYBrid Bond Index. Of those, 16 were high yield-rated and 212 were
BBB-rated bonds. High-yield rated bonds accounted for approximately
18% of the Index.
For more information about the new iShares funds, please visit
www.iShares.ca. All other inquiries: 1-866-iShares (1-866-474-2737)
or email iSharesCanada@blackrock.com.
About BlackRock
BlackRock is a leader in investment management, risk management
and advisory services for institutional and retail clients
worldwide. At June 30, 2010, BlackRock's AUM was $3.151 trillion.
BlackRock offers products that span the risk spectrum to meet
clients' needs, including active, enhanced and index strategies
across markets and asset classes. Products are offered in a variety
of structures including separate accounts, mutual funds, iShares®
(exchange traded funds), and other pooled investment vehicles.
BlackRock also offers risk management, advisory and enterprise
investment system services to a broad base of institutional
investors through BlackRock Solutions. Headquartered in New York
City, as of June 30, 2010, the firm has approximately 8,500
employees in 24 countries and a major presence in key global
markets, including North and South America, Europe, Asia, Australia
and the Middle East and Africa. For additional information, please
visit the company's website at www.blackrock.com.
About iShares ETFs
The iShares business is a global product leader in ETFs with
over 410 funds globally across equities, fixed income and
commodities, which trade on 16 exchanges worldwide. The iShares
funds are bought and sold like common stocks on securities
exchanges. The iShares funds are attractive to many individual and
institutional investors and financial intermediaries because of
their relative low cost, tax efficiency and trading flexibility.
Investors can purchase and sell securities through any brokerage
firm, financial advisor, or online broker, and hold the funds in
any type of brokerage account. The iShares customer base consists
of the institutional segment of pension plans and fund managers, as
well as the retail segment of financial advisors.
Contacts: Veritas Communications Lisa An 416-955-4587 or
Cellular: 647-292-2478 an@veritascanada.com
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