iShares Files For iShares Sovereign Screened Global Bond Fund ETF

iShares has filed paperwork with the SEC for a “iShares Sovereign Screened Global Bond Fund.” The iShares Sovereign Screened Global Bond Fund (the “Fund”) seeks to generate current income while striving to mitigate downside risk by investing principally in global sovereign debt obligations. They did not specify a trading symbol or expense ratio in the initial filing.

Principal Investment Strategies

The Fund seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets in bonds denominated in local currencies and the U.S. dollar, issued by governments in both developed and emerging market countries. The Fund is an exchange-traded fund (“ETF”), but does not seek to replicate the performance of a specified index. The Fund will seek to maintain specific exposure to global government bonds with targeted investment characteristics. BFA utilizes a model-based proprietary investment process to assemble the investment portfolio from a defined group of developed and emerging market countries across all credit rating categories, including below investment grade (commonly referred to as high yield or “junk bonds”). The investment process primarily utilizes the universe of sovereign debt issuers included in the BlackRock Sovereign Risk Index, a proprietary model that scores countries using a comprehensive list of relevant fiscal, financial and institutional metrics to assess sovereign credit risk. These country scores, along with other model-driven factors, are used to construct the Fund’s investment portfolio by screening out lower scoring countries and weighting the remaining sovereigns based on their scores. As of September 30, 2011, there were 44 countries in the universe of eligible countries, any of which may or may not be held in the Fund. This proprietary investment process is intended to provide an increased exposure to sovereign debt securities issued by countries with higher credit quality, as defined by the model, than would a fund that seeks to replicate the performance of a broad global government bond index that is weighted more heavily towards countries based on their amount of debt outstanding. Countries may be added to, eliminated from or replaced in the universe of eligible countries at any time, and the model may score countries differently overtime, which means that countries may be added to, deleted from or reweighted within the model.

The Fund may have a higher portfolio turnover than funds that seek to replicate the performance of an index.

The Fund will not invest in swap agreements, futures contracts or option contracts, but may invest in currency forwards for hedging and/or trade settlement purposes. The Fund may invest in cash and cash equivalents, including money market funds advised by BFA or its affiliates.

The Fund may lend securities representing up to one-third of the value of the Fund’s total assets (including the value of the collateral received).

For the complete filing click: HERE

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