BlackRock signs bond ETF benchmark deal with ICE Data Services

ICE Data Services is now BlackRock’s benchmark provider for four of the asset manager’s fixed income ETFs.

BlackRock is now using ICE Data Services as its new benchmark provider for four of its iShares US bond exchange-traded funds (ETFs) with a combined $18.9 billion in asset under management.

The four funds, which includes the iShares Broad USD Investment Grade Corporate ETF, iShares Short-Term Corporate Bond ETF, iShares Intermediate-Term Corporate Bond ETF and iShares Long-Term Corporate Bond ETF, will now be benchmarked to ICE Data Indices.

“As investors have expressed a desire for more focused corporate exposure, these index changes will ensure we offer the right ETFs for our clients’ evolving needs,” said Heather Brownlie, head of US iShares fixed income at BlackRock.

“We’re pleased to work with ICE as the new benchmark index provider for these ETFs. With its proven expertise in index design and calculation services, and the high quality of its underlying data and analytics, ICE Data Indices were a natural choice for these funds.”

The benchmark deal follows BlackRock’s recent agreement with ICE to provide its support and to help develop a new fixed income ETF platform. The platform, due to go-live in 2019, subject to regulatory approval, will be connected to ICE’s fixed income trading platform BondPoint, TMC Bonds and ICE Credit Trade.

ICE added that the platform will look to enforce industry standards to facilitate creation and redemption orders to ease the current processes for ETFs.

The ETF market in the US has seen net assets surge six-fold over the past decade to $3.4 trillion, according to statistics from the Investment Company Institute. Fixed income ETFs have led the trend as one of the fastest-growing segments within ETFs, with annual growth of more than 30% during the last ten years.

“BlackRock iShares is a leader in ETF issuance and we’re excited to have been selected as the index provider for these funds,” Lynn Martin, chief operating officer of ICE Data Services, concluded.  

“As the trend towards indexation continues to grow, our innovative and flexible index services offer a wide range of indices and customised solutions to meet the evolving needs of our customers.”