Global investment giant BlackRock is set to launch its inaugural actively managed, income-oriented exchange-traded fund in Australia — the iShares Credit Income Active ETF, trading under the ASX ticker ICME.
Scheduled for listing in late November, ICME is designed to provide investors with consistent monthly income while targeting returns that exceed the Reserve Bank of Australia’s cash rate. The fund will primarily invest in Australian investment-grade corporate bonds, spanning both senior and subordinated credit. It also has the flexibility to incorporate select securitised assets to enhance portfolio diversification.
BlackRock describes ICME as a core income solution for fixed income allocations, offering a stable complement to higher-risk credit and fixed income strategies. The ETF will carry a management fee of 0.29%.
This launch marks a significant step in BlackRock’s expansion of active ETF offerings in the region, catering to growing demand for income-generating investment options amid evolving market conditions.
Katherine Palmer, BlackRock head of fixed income and credit product strategy for Australia, said: “After years of low rates, yields have reset higher. ICME is designed to help investors navigate the transition in the market with the phasing out of bank hybrid securities and those seeking an easy-to-understand higher-income product. The Australian credit market continues to deepen and broaden, with more issuers opting for local issuance rather than offshore. This trend creates a diverse set of opportunities for the portfolio.”
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BlackRock head of global product solutions for Australasia Steve Ead said: “Active ETFs are reshaping how investors access fixed income. With the launch of IACT earlier this year and now ICME, we’re expanding access to BlackRock’s active investment expertise in Australia while delivering the transparency and efficiency iShares is known for.
“Despite bond ETFs growing to roughly US$2.7 trillion globally, they still account for only about 2% of the approximately US$140 trillion bond market-underscoring the opportunity ahead. ICME combines active management with iShares’ scale and innovation to help meet evolving investor needs.”
