iShares Total USD Fixed Income Market ETF Stock Price, News & Analysis

The iShares Total USD Fixed Income Market ETF (BTOT) is an exchange-traded fund launched by BlackRock under the iShares brand. According to BlackRock, BTOT is described as the industry’s first index ETF that seeks to provide investors with comprehensive access to the full taxable US bond market in a single solution. The fund is listed on the NYSE under the ticker BTOT and is designed for investors who want broad exposure to the US fixed income universe through one ETF.

BTOT seeks to track the Bloomberg US Total Fixed Income Market Index. This benchmark was built by Bloomberg Index Services Limited to reflect how fixed income portfolios have expanded over time and to capture the full investable US fixed income universe across sectors and ratings. BlackRock states that this index expands exposure beyond traditional broad multi-sector fixed income benchmarks, including exposure beyond the Bloomberg US Aggregate Index and the Bloomberg US Universal Index.

In the description of the fund launch, BlackRock highlights that the US fixed income market has grown beyond traditional benchmarks to include sectors such as bank loans, inflation-linked securities, and floating rate notes. BTOT is presented as a way to access this broader opportunity set in one ETF, with the goal of helping investors build diversified portfolios and obtain exposure to areas of the bond market that have historically been excluded from many broad index products.

The Bloomberg US Total Fixed Income Market Index that BTOT tracks is described as covering the full investable fixed income universe across sectors and ratings, offering a widely diverse and transparent measure of the US fixed income markets. The collaboration between BlackRock and Bloomberg Index Services Limited on this ETF is noted as reflecting a shared focus on aligning index design with the evolution of fixed income portfolios.

BlackRock positions BTOT as part of its multi-sector fixed income ETF lineup. In the launch materials, BlackRock notes that BTOT can serve as a key building block for investor portfolios and can complement other iShares fixed income ETFs that focus on investment-grade exposure and core-plus strategies. BTOT’s design incorporates exposure to areas such as bank loans, floating-rate notes, and Treasury Inflation-Protected Securities (TIPS) alongside more traditional fixed income sectors, with the intention of providing broader diversification and potential income sources within a single fund.

The fund launch communication also discusses the broader context for BTOT. BlackRock notes that structural changes in the bond market and increased interest rate volatility may have increased the need for diversified sources of income and resilience within portfolios. BTOT is described as aiming to meet this need by delivering comprehensive exposure to the taxable US bond market in one ETF structure.

In connection with BTOT, BlackRock and iShares emphasize their experience in fixed income ETFs. iShares is described as having more than twenty years of ETF experience and a global lineup of approximately 1,700 ETFs, with a significant amount of assets under management in bond ETFs. BlackRock also notes that it pioneered the first bond ETF in 2002 and continues to develop fixed income ETFs as part of its broader investment and financial technology platform.

The launch materials for BTOT include standard risk disclosures related to fixed income investing. These disclosures explain that investing involves risk, including possible loss of principal, and that fixed income risks include interest-rate and credit risk. They also describe risks associated with specific types of fixed income securities that may be represented in the index and, by extension, in the fund’s portfolio, such as asset-backed securities, mortgage-backed securities, commercial mortgage-backed securities, floating or variable rate securities, and TIPS. The disclosures note that there is no guarantee that interest rate risk will be reduced or eliminated within the fund.

BlackRock also highlights that TIPS can provide a hedge against inflation because their inflation adjustment feature helps preserve purchasing power, while noting that these securities may have lower yields than conventional fixed rate bonds and may decline in price during periods of deflation. For asset-backed and mortgage-related securities, the disclosures mention risks such as prepayment, extension, valuation, liquidity, and default risk, and emphasize that small movements in interest rates may significantly affect the value of certain securities in these categories.

As with other iShares funds, BTOT is distributed by BlackRock Investments, LLC and is subject to the general considerations and risk factors described in its prospectus and, if available, summary prospectus. BlackRock’s materials stress the importance of carefully considering the fund’s investment objectives, risk factors, charges, and expenses before investing, and recommend reviewing the fund’s prospectus for detailed information.

BTOT’s stated objective and benchmark

According to the launch announcement, BTOT’s investment objective is to seek to track the Bloomberg US Total Fixed Income Market Index. This index is described by Bloomberg Index Services Limited as tracking the full investable fixed income universe across all sectors and ratings in the US market. The index is presented as a diverse and transparent measure of US fixed income markets and is positioned as an expansion relative to existing broad multi-sector benchmarks.

BlackRock notes that the index provides access to sectors that have historically been excluded from many broad multi-sector index fixed income products. In the fund launch communication, BlackRock states that the index expands exposure relative to the Bloomberg US Aggregate Index and the Bloomberg US Universal Index, indicating that BTOT’s benchmark is designed to capture a broader slice of the taxable US bond market.

Role of BTOT within iShares fixed income offerings

BlackRock describes BTOT as part of its multi-sector fixed income ETF suite. In the launch materials, BlackRock notes that BTOT can complement other iShares funds that focus on investment-grade exposure and core-plus strategies. Within this context, BTOT is positioned as a fund that incorporates exposure to additional sectors of the bond market, including bank loans, floating-rate notes, and TIPS, to provide more comprehensive coverage of the taxable US fixed income universe.

The description of BTOT emphasizes that it is intended to serve as a key building block for investor portfolios. By offering exposure to a broad range of fixed income sectors in a single ETF, BTOT is presented as a way for investors to access a diversified set of income sources and risk profiles within the US bond market, as defined by its benchmark index.

Risk considerations highlighted by BlackRock

The BTOT launch communication includes detailed risk disclosures that apply to fixed income investing generally and to the types of securities represented in the fund’s benchmark. BlackRock notes that investing involves risk, including the possible loss of principal. Fixed income risks are described as including interest-rate risk, where rising interest rates can lead to declines in the value of debt securities, and credit risk, which refers to the possibility that a debt issuer may be unable to make principal and interest payments.

Additional risks are described for specific types of securities that may be reflected in the index. For TIPS, BlackRock notes that while these securities can help hedge against inflation, they typically offer lower yields than conventional fixed rate bonds and may decline in price during periods of deflation. For asset-backed securities, the disclosures mention credit, interest rate, call, extension, valuation, and liquidity risk, as well as the risk of default on the underlying assets, particularly during economic downturns. For mortgage-backed and commercial mortgage-backed securities, prepayment and extension risk are highlighted, along with the potential for small changes in interest rates to significantly affect their value.

BlackRock also notes that securities with floating or variable interest rates may decline in value if their coupon rates do not keep pace with comparable market interest rates, and that a fund’s income may decline when interest rates fall if many of the debt instruments held have floating or variable rates. The disclosures state that there is no guarantee that interest rate risk will be reduced or eliminated within the fund and that an investment in the fund is not insured or guaranteed by any government agency.

About BlackRock and iShares in relation to BTOT

In the BTOT launch materials, BlackRock describes its broader role in the ETF and fixed income markets. BlackRock states that iShares is a global ETF platform with a large lineup of funds and significant assets under management in bond ETFs. The communication notes that iShares funds are supported by BlackRock’s portfolio and risk management capabilities and that BlackRock has been involved in bond ETFs since it pioneered the first bond ETF in 2002.

BlackRock also describes its overall purpose as helping more people experience financial well-being and notes that, as a fiduciary to investors and a provider of financial technology, it seeks to make investing easier and more affordable. iShares is described as focusing on meeting the evolving needs of investors and providing ETF strategies that reflect developments in global markets, including the fixed income markets that BTOT is designed to track.

The information provided in the BTOT launch materials is presented as general information that does not take into account individual financial circumstances and is not intended as a recommendation or investment advice. BlackRock emphasizes that investors should review the fund’s prospectus and consider consulting a financial professional before making investment decisions related to BTOT or any other fund.