BlackRock Hedges Its Bets — Literally (ETF Included)

Core Insights - BlackRock launched the iShares Global Government Bond USD Hedged Active ETF (GGOV), the first actively managed ETF providing USD-hedged exposure to global government bonds, addressing the demand for diversified fixed income solutions [1][5] - The fund has an expense ratio of 0.39% and follows the Bloomberg Global Treasury USD Hedged Index as its benchmark, with historical performance indicating better returns with less volatility compared to U.S.-only bond indices [2] - GGOV aims to mitigate overexposure to long-dated U.S. Treasuries, which are seen as increasingly risky, by providing a worldwide strategy that enhances yields and reduces risk when U.S. interest rates exceed international rates [4] Market Context - The launch of GGOV coincides with a period of elevated inflation, large budget deficits, and rising issuance, making it a valuable tool for U.S. asset allocators [3] - The ETF is positioned to meet the needs of investors reassessing their bond exposures in light of global rate changes and ongoing inflation, combining active alpha creation with a USD hedge for both defense and diversification [5] - GGOV is part of BlackRock's expanding fixed income offerings, contributing to its $52 billion U.S. active ETF platform and its $1 trillion global bond ETF franchise [5]