The fund will provide exposure to the US dollar-denominated floating-rate bonds.

BlackRock has launched a new floating-rate bond fund, as it expands its fixed income exchange traded fund range and keeps an eye on the risk of higher interest rates to come.

The iShares $ Floating Rate Bond UCITS ETF is designed to protect investor portfolios against a rise in interest rates, the firm said in a statement.

The fund will provide exposure to the US dollar denominated floating rate bonds. Floating-rate bonds offer coupons that adjust to reflect changes in interest rates, compared with traditional bonds which pay fixed coupons.

“Concerns about rising rates have prompted many investors to consider moving out of longer-duration bonds, this fund provides investors with a way to reduce duration and protect portfolios against periods of rising interest rates,” said Brett Pybus, head of iShares EMEA fixed income strategy. “The fund provides investors with exposure to short dated, high quality floating rate credit denominated in US dollars and offers an attractive yield compared with money market funds. Our focus continues to be on developing a broad and granular range of ETFs that help investors build precise and cost efficient portfolios, and this fund is testament to that.”