BondBloxx Launches Duration-Focused Emerging Market ETF

BondBloxx Investment Management announced the launch of the BondBloxx JP Morgan USD Emerging Markets 1-10 Year Bond ETF (XEMD), which begins trading today on CBOE. The fund tracks the J.P. Morgan EMBI Global Diversified Liquid 1-10 Year Maturity Index and includes U.S.-denominated fixed-rate and floating-rate instruments with at least $1 billion in outstanding debt issued by sovereign and quasi-sovereign entities in index-eligible countries.

“As a truly novel product with a compelling risk/return profile, we believe XEMD is a valuable addition to the marketplace because it enables emerging market exposure while simultaneously addressing creeping duration risk,” said Paul Van Gilder, investment officer and portfolio manager, Municipal Employees’ Retirement System (MERS) of Michigan. “As rates continue to rise, we think these kinds of tools will become even more critical.”

XEMD is BondBloxx’s 11th listing since February 2022, joining seven sector-specific high yield ETFs and three new ratings-specific ETFs listed in May. The company has also filed a prospectus for a series of eight duration-specific Treasuries ETFs.

“Today’s volatile markets present more challenges than ever for fixed income investors,” said BondBloxx co-founder Tony Kelly in a news release. “At BondBloxx, we’re working for, and with, investors to develop new products that address these challenges – like providing more control over duration risk.”

In a landscape where less than one quarter of the ETF products available in the U.S. provide fixed income exposure, despite similar market capitalizations in bond and equity markets, the company aims to provide better tools for investors through specialized, targeted fixed income products.

“As a forward-thinking asset owner, we are always looking for the best tools available to provide our members a secure retirement,” said Jeb Burns, CIO, MERS of Michigan. “A wide array of new, sophisticated ETFs has given us many more tools to choose from, and BondBloxx’s precision fixed income ETFs are another big step in that evolution.”

Launched in October of 2021 to provide precision ETF exposures for fixed income investors, BondBloxx Investment Management was founded by ETF industry leaders Leland Clemons, Joanna Gallegos, Tony Kelly, Elya Schwartzman, Mark Miller, and Brian O’Donnell. The team has collectively built and launched over 350 ETFs at firms including BlackRock, JPMorgan, State Street, Northern Trust, and HSBC.

For more news, information, and strategy, visit the Institutional Income Strategies Channel.