BlackRock has launched the iShares Global Government Bond USD Hedged Active ETF (ticker: GGOV), the first actively managed, currency-hedged government bond ETF in the industry, aimed at providing U.S. investors with a globally diversified sovereign bond allocation. 

“USD-hedged global government bonds have historically generated higher yields with lower volatility compared to comparable US-only bond indices,” said Tom Becker, lead portfolio manager for GGOV. “We believe that GGOV will be an important tool for many U.S. asset allocators in the current environment of elevated inflation, large budget deficits, and rising issuance.” 

GGOV is designed to reduce concentrated exposure to long-duration U.S. Treasuries by allocating across developed-market sovereign debt. The fund employs a currency hedge on non-U.S. holdings to potentially enhance yield when U.S. interest rates exceed those of other countries, while also aiming to reduce overall portfolio risk. 

Managed by BlackRock’s Global Tactical Asset Allocation team, GGOV blends systematic and discretionary strategies similar to the BlackRock Tactical Opportunities Fund (PBAIX). The fund expands BlackRock’s $52 billion U.S. active ETF suite and adds to its $1 trillion global bond ETF franchise.