iBoxx licenses indexes for exchange-traded funds

Frankfurt-based indexing company iBoxx and Pennsylvania-based exchange-traded fund (ETF) company iShares have struck a deal to license iBoxx indexes as the basis for European fixed-income ETFs to be launched on Deutsche Börse. The new products are scheduled for trading early next year, subject to regulatory approval.

iShares is managed by UK asset management firm Barclays Global Investors (BGI) and iBoxx is a joint venture between ABN Amro, Barclays Capital, BNP Paribas, Deutsche Bank, Dresdner Kleinwort Wasserstein, Morgan Stanley, UBS Warburg and Deutsche Börse. iBoxx indexes are based on real-time bond prices contributed by the consortium of investment banks.

"The iBoxx ETFs will offer institutional and retail investors a liquid, transparent and flexible investment tool, allowing them to diversify their portfolio through the purchase of a single security,” said John Demaine, director of iShares. “They will also be one of the cheapest ways to invest in bond indexes in Europe."

The complete range of BGI/iShares comprises more than 100 ETFs worldwide with assets under management of €26 billion.