BlackRock launches iShares Interest Rate Hedged Emerging Markets Bond

By Toni Weeks

San Luis Obispo, Calif., June 8 – iShares announced the launch of the iShares Interest Rate Hedged Emerging Markets Bond exchange-traded fund, according to an N-1A filing with the Securities and Exchange Commission.

The fund seeks to mitigate the interest rate risk of a portfolio composed of dollar-denominated, emerging market bonds. Under normal circumstances, it invests at least 80% of its net assets in its portfolio, in one or more underlying funds that principally invest in emerging market bonds and in U.S. Treasury securities.

According to the filing, the fund will initially invest a substantial portion of its assets in its underlying fund, the iShares J.P. Morgan USD Emerging Markets Bond ETF.

The fund will attempt to mitigate the interest rate risk of the underlying securities primarily through the use of short positions in U.S. Treasury futures contracts and interest-rate swaps. The fund may also invest in other interest rate futures contracts, including eurodollar and Federal Funds futures.

The shares trade on the NYSE Arca under the symbol “EMBH.”

There are no shareholder fees. Including management fees of 0.75% and taking into account a fee waiver agreement with the investment adviser, total annual fund operating expenses are expected to be 0.5%.

James Mauro and Scott Radell are the portfolio managers.

San Francisco-based BlackRock Fund Advisors is the investment adviser.

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