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BlackRock Launches ETF That Covers the Entire US Bond Market in One Fund

MarketDash Editorial Team
9 hours ago
BlackRock's new iShares ETF gives investors access to the full spectrum of US taxable bonds, including bank loans and TIPS, without juggling multiple funds.

If you've ever felt like building a properly diversified bond portfolio requires assembling five different ETFs like some kind of fixed-income Voltron, BlackRock (BTOT) has news for you.

The asset management giant rolled out the iShares Total USD Fixed Income Market ETF (BTOT) on Tuesday, billing it as the first index-based ETF to capture the entire taxable US bond market in one package. This isn't just another core bond fund. It's designed to give investors everything from investment-grade corporates to bank loans to Treasury Inflation-Protected Securities without needing to layer multiple funds together.

The timing makes sense. After years of wild interest rate swings, bond investors are rethinking how they build portfolios. Traditional core bond allocations don't always cut it anymore when you're trying to hedge against inflation spikes or rate volatility.

BTOT tracks the Bloomberg US Total Fixed Income Market Index, which casts a significantly wider net than the familiar Bloomberg US Aggregate Index. According to BlackRock's announcement, this benchmark is roughly 28% broader than the Agg and 9% wider than the Bloomberg US Universal Index. The difference comes from including sectors that typically get left out of core bond ETFs.

We're talking bank loans, TIPS, and floating-rate notes. These instruments have become increasingly popular as investors hunt for protection against inflation and interest rate uncertainty. By bundling them all together, BTOT eliminates the need to stitch together three or four different funds just to get comprehensive fixed-income exposure.

Steve Laipply, global co-head of fixed income ETFs at iShares, put it plainly: "Bond markets have evolved dramatically over the years, and investors need tools that keep pace with this change." He added that BTOT is designed to help investors diversify their portfolios with simpler, more efficient access.

The pricing is competitive too. BTOT carries a gross expense ratio of 0.10% and a net expense ratio of 0.09%, putting it in the same ballpark as other large-cap index bond funds.

BlackRock emphasized that BTOT isn't meant to replace their existing bond offerings. Think of it as another tool in the kit. They still recommend AGG for straightforward investment-grade exposure and IUSB for core-plus strategies. BTOT is positioned as a comprehensive building block that adds exposures those funds don't cover, giving investors more flexibility depending on their specific needs and market outlook.

Back to News

BlackRock Launches ETF That Covers the Entire US Bond Market in One Fund

MarketDash Editorial Team
9 hours ago
BlackRock's new iShares ETF gives investors access to the full spectrum of US taxable bonds, including bank loans and TIPS, without juggling multiple funds.

If you've ever felt like building a properly diversified bond portfolio requires assembling five different ETFs like some kind of fixed-income Voltron, BlackRock (BTOT) has news for you.

The asset management giant rolled out the iShares Total USD Fixed Income Market ETF (BTOT) on Tuesday, billing it as the first index-based ETF to capture the entire taxable US bond market in one package. This isn't just another core bond fund. It's designed to give investors everything from investment-grade corporates to bank loans to Treasury Inflation-Protected Securities without needing to layer multiple funds together.

The timing makes sense. After years of wild interest rate swings, bond investors are rethinking how they build portfolios. Traditional core bond allocations don't always cut it anymore when you're trying to hedge against inflation spikes or rate volatility.

BTOT tracks the Bloomberg US Total Fixed Income Market Index, which casts a significantly wider net than the familiar Bloomberg US Aggregate Index. According to BlackRock's announcement, this benchmark is roughly 28% broader than the Agg and 9% wider than the Bloomberg US Universal Index. The difference comes from including sectors that typically get left out of core bond ETFs.

We're talking bank loans, TIPS, and floating-rate notes. These instruments have become increasingly popular as investors hunt for protection against inflation and interest rate uncertainty. By bundling them all together, BTOT eliminates the need to stitch together three or four different funds just to get comprehensive fixed-income exposure.

Steve Laipply, global co-head of fixed income ETFs at iShares, put it plainly: "Bond markets have evolved dramatically over the years, and investors need tools that keep pace with this change." He added that BTOT is designed to help investors diversify their portfolios with simpler, more efficient access.

The pricing is competitive too. BTOT carries a gross expense ratio of 0.10% and a net expense ratio of 0.09%, putting it in the same ballpark as other large-cap index bond funds.

BlackRock emphasized that BTOT isn't meant to replace their existing bond offerings. Think of it as another tool in the kit. They still recommend AGG for straightforward investment-grade exposure and IUSB for core-plus strategies. BTOT is positioned as a comprehensive building block that adds exposures those funds don't cover, giving investors more flexibility depending on their specific needs and market outlook.