BlackRock has entered Europe’s active fixed income ETF market with a euro cash strategy, ETF Stream can reveal.
The iShares € Cash UCITS ETF (YCSH) is listed on the Deutsche Boerse with a total expense ratio (TER) of 0.10%.
BlackRock described the strategy as Europe’s “first actively managed short-term money market fund regulated ETF”.
It added YCSH enables individual investors through channels such as digital platforms to access money market level yields – currently around 3.12% gross annualised – with no minimum holding period from just €1.
The ETF achieves this by providing exposure to short term instruments adhering to European MMF regulation (MMFR), with BlackRock’s International Cash Management team responsible for actively adjusting the portfolio’s duration, credit exposure and liquidity profiles.
The firm also noted YCSH can be used by discretionary portfolio managers within the liquidity and cash sleeves of their portfolios owing to the the MMFR adherence of its underlying.
Jane Sloan (pictured), EMEA head of global product solutions at BlackRock, commented: “YCSH combines the flexibility and access of the ETF wrapper, including continuous pricing and the ability to trade seamlessly throughout the day, with the security of money market fund regulation, delivering a first-to-market solution to investors who want to do more with their money.
“Europeans have shown demand for income investments this year and YCSH expands the choice available to them without a fixed term of investment.”
Beccy Milchem, global head of cash distribution and head of international cash management, added: “Cash plays a critical role in a well-rounded investment strategy. We are delighted to bring the breadth and depth of BlackRock’s active cash expertise to a broader range of investors utilising the convenience of ETFs.
“The demand for money market funds has surged in the higher rate environment and investors have sought to more actively manage their cash holdings.”
YCSH’s arrival follows a surge in demand for cash-like ETFs on digital platforms, led by overnight rate strategies including the $12.8bn Xtrackers EUR Overnight Rate UCITS ETF (XEON) and the actively managed $5.5bn Lyxor Smart Overnight Return UCITS ETF (CSH2) booking $9.8bn net new assets during the year-to-date to 26 November, according to Trackinsight data.
The ETF differentiates from existing active short maturity income ETFs housing billions of dollars of assets from the likes of PIMCO and JP Morgan Asset Management, owing to its regulated money market fund exposure.
