The iShares $ Ultrashort Bond UCITS ETF (ERNA) is an Ireland-domiciled fixed-income ETF managed by BlackRock through its iShares platform. ERNA is the ticker for the fund's U.S. dollar listing on the London Stock Exchange.

The fund seeks to track the iBoxx USD Liquid Investment Grade Ultrashort Index, a benchmark comprising U.S. dollar-denominated investment-grade corporate bonds with very short maturities.

ERNA follows a passive investment strategy and uses physical replication through representative sampling. The fund therefore holds a selection of securities designed to closely replicate the risk and return characteristics of its benchmark without necessarily owning every bond included in the index.

Composition / Exposure Profile

ERNA primarily holds U.S. dollar-denominated investment-grade corporate bonds issued across different sectors, including:

• Financials.

• Consumer cyclical.

• Consumer non-cyclical.

• Technology.

• Capital goods.

• Insurance.

• Energy.

• Communications.

• Utilities.

The portfolio's focus on very short maturities results in relatively low duration. This reduces its sensitivity to changes in interest rates, although the fund remains exposed to credit, liquidity, and other fixed-income market risks.

The U.S. dollar denomination of the securities does not mean that all issuers are based in the United States. Companies from different countries can issue USD-denominated debt and become eligible for the index when they meet its requirements.

Structure and Costs

The fund and share class have the U.S. dollar as their base currency. On the London Stock Exchange, the accumulating share class trades in USD under ERNA.

The ETF has a total expense ratio (TER) of 0.09% per year, uses physical replication through representative sampling, and is domiciled in Ireland. It operates as part of iShares IV plc under the UCITS framework.

ERNA follows an accumulating income policy. Interest and other income generated by the portfolio are therefore reinvested within the fund rather than periodically distributed to shareholders.

History and Evolution of the ETF

The iShares $ Ultrashort Bond UCITS ETF USD (Acc) (ERNA) share class was launched in 2018 as part of a strategy providing exposure to very short-maturity, U.S. dollar-denominated investment-grade corporate bonds.

Since its launch, the share class has maintained a passive strategy linked to the iBoxx USD Liquid Investment Grade Ultrashort Index, using representative sampling to track its performance. Throughout its history, ERNA's performance has primarily reflected conditions in the U.S. dollar corporate credit market and movements in short-term interest rates. 

Additional Information

iShares $ Ultrashort Bond UCITS ETF USD Acc (Ireland) is an exchange-traded fund (ETF), with assets under management totaling $1.47 billion.

Over the past 12 months, iShares $ Ultrashort Bond UCITS ETF USD Acc recorded a return of 3.70%, with its price trading between $6.21 and $6.45 during the same period.

The ETF is traded under the ticker ERNA.