iShares

Fixed Income



Investors have long looked to fixed income as an important component of a balanced portfolio that can provide stability and offset some of the volatility associated with the rest of their portfolio. Fixed income is also increasingly seen as an alternative to cash investments1 and in low interest rate environments a good place to search for yield.

Why use fixed income?


  • Seek to generate income: regular coupon payments can provide cash flow
  • Help preserve capital: bonds generally offer less risk
  • Anchor a portfolio: bonds returns are generally more stable than stock returns (See table)



Source: Bloomberg. As measured by the Barclays Capital US Aggregate Bond Index and S&P 500 Index. Index returns are for illustrative purposes only. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.

Why ETFS for Fixed Income exposure?


Fixed income ETFs have revolutionized the fixed income landscape and help bring liquid access, transparency and ETF diversification to investors. By purchasing a fixed income ETF, an investor can obtain exposure to a certain segment of the fixed income market in one trade, reducing the need to research, price, purchase, and manage a large number of individual bonds.

Fixed income ETFs are designed to track institutional quality indices much like bond mutual funds do, but fixed income ETFs can be bought and sold on a public exchange, like a stock. Fixed income ETFs tend to offer low management fees and offer exchange traded liquidity.

Investors can use fixed income ETFs to express views on the economy or interest rates, to capture relative value across bond market sectors or, more strategically, to build out the core of a balanced equity/fixed income portfolio in a low-cost, tax efficient manner.

With over 30 Fixed Income iShares ETFs to choose from you can build your portfolio the way you want:

Treasuries Mortgage
Backed		 Municipals Corporates Agencies Inflation
Protected		 Foreign
SHV MBB MUB CSJ AGZ TIP EMB
SHY   SUB CFT   STIP LEMB
IEI     LQD   GTIP IGOV
TLT     HYG   ITIP ISHG

1 Fixed income investments are not equivalent to and involve risks not associated with cash investments.

Get Started by using the Fixed Income Portfolio Builder

The Fixed Income Portfolio Builder tool lets users assemble hypothetical portfolios to meet specific risk parameters and/or yield targets, generating an actual sample portfolio that includes holdings and weights. Portfolios can be modified over time based on changing market conditions, views, or investor circumstances that would warrant revisions to risk and return objectives. Users can also modify inputs to perform scenario analyses.
Related Funds
SHV
iShares Barclays Short Treasury Bond Fund
SHY
iShares Barclays 1-3 Year Treasury Bond Fund
IEI
iShares Barclays 3-7 Year Treasury Bond Fund
TLT
iShares Barclays 20+ Year Treasury Bond Fund
MBB
iShares Barclays MBS Bond Fund
MUB
iShares S&P National AMT-Free Municipal Bond Fund
SUB
iShares S&P Short Term National AMT-Free Municipal Bond Fund
CSJ
iShares Barclays 1-3 Year Credit Bond Fund
CFT
iShares Barclays Credit Bond Fund
LQD
iShares iBoxx $ Investment Grade Corporate Bond Fund
HYG
iShares iBoxx $ High Yield Corporate Bond Fund
AGZ
iShares Barclays Agency Bond Fund
TIP
iShares Barclays TIPS Bond Fund
STIP
iShares Barclays 0-5 Year TIPS Bond Fund
GTIP
iShares Global Inflation-Linked Bond Fund
ITIP
iShares International Inflation-Linked Bond Fund
EMB
iShares JPMorgan USD Emerging Markets Bond Fund
LEMB
iShares Emerging Markets Local Currency Bond Fund NEW
IGOV
iShares S&P/Citigroup International Treasury Bond Fund
ISHG
iShares S&P/Citigroup 1-3 Year International Treasury Bond Fund

Carefully consider the iShares Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses, which may be obtained by calling 1-800-iShares (1-800-474-2737), or by viewing or downloading a prospectus. Read the prospectus carefully before investing.

Investing involves risk, including possible loss of principal.

Diversification and asset allocation may not protect against market risk.

Transactions in shares of the iShares Funds will result in brokerage commissions and will generate tax consequences. iShares Funds are obliged to distribute portfolio gains to shareholders.

Shares of the iShares Funds may be sold throughout the day on the exchange through any brokerage account. However, shares may only be redeemed directly from the fund by Authorized Participants, in very large creation/redemption units. There can be no assurance that an active trading market for shares of an ETF will develop or be maintained.

When comparing bonds and iShares Funds, it should be remembered that management fees associated with fund investments, like iShares Funds, are not borne by investors in individual bonds.

The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. The information provided is not intended to be a complete analysis of every material fact respecting any strategy.

Bonds and bond funds will decrease in value as interest rates rise. A portion of a municipal bond fund's income may be subject to federal or state income taxes or the alternative minimum tax. Capital gains, if any, are subject to capital gains tax. High yield securities may be more volatile, be subject to greater levels of credit or default risk, and may be less liquid and more difficult to sell at an advantageous time or price to value than higher-rated securities of similar maturity. TIPS can provide investors a hedge against inflation, as the inflation adjustment feature helps preserve the purchasing power of the investment. Because of this inflation adjustment feature, inflation protected bonds typically have lower yields than conventional fixed rate bonds and will likely decline in price during periods of deflation, which could result in losses. Government backing applies only to government issued securities, not iShares exchange traded funds. An investment in the fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume.

The iShares Funds ("Funds") are distributed by SEI Investments Distribution Co. ("SEI"). BlackRock Fund Advisors ("BFA") serves as the investment advisor to the Funds. BFA is a subsidiary of BlackRock Institutional Trust Company, N.A., neither of which is affiliated with SEI.

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by iBoxx®, JPMorgan Chase & Co. or Standard & Poor's, nor are they sponsored, endorsed, or issued by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the companies listed above.

© 2000-2012 BlackRock Institutional Trust Company, N.A. All rights reserved. iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A. BlackRock® is a registered trademark of BlackRock, Inc. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

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