The Fund seeks to achieve its objective by tracking the performance of the Bloomberg Global Aggregate Corporate Bond Index (Total Return, Hedged to AUD) (referred to in this section 3 of the PDS as the Index).

The Fund aims to provide investors with the performance of an 
index, before fees and expenses (including the cost of hedging)

Benefits of iShares

iShares ETFs are managed funds listed or quoted on exchanges (including ASX) providing you with the opportunity to gain exposure to a diversified portfolio of assets in a single transaction.

The significant benefits of investing in the Funds include:

• cost effective access to diversified portfolios of global fixed income securities;

• currency-hedged access to investment grade corporate, high yield corporate and emerging market bond exposures; and

• the use of a process known as hedge accounting to seek a more consistent distribution profile (refer to the section of this PDS titled "Hedge accounting for further information).

Other benefits of investing in iShares ETFs generally include:

• Diversification: In contrast to a direct investment in a single company or bond, an iShares ETF provides, as far as possible and practicable, exposure to all of the securities or instruments within the index that the particular iShares ETF seeks to track.

• Access global markets: iShares ETFs let you achieve international diversification by investing in overseas equity and bond markets. With iShares ETFs you can gain exposure by asset class, market capitalisation, country and sector.

• Liquidity and transparency: Each iShares ETF seeks investment results that correspond generally to the performance (before fees and expenses) of a particular index. As a traded security, an iShares ETF enables you to enter and exit your holding on the ASX. You can easily track performance and trade during ASX trading hours (subject to ASX rules).

• Managing risk: Investing in an iShares ETF can assist you in establishing a portfolio appropriate to your investment needs and risk profile.

• Lower cost: As each iShares ETF is passively managed and designed to track the performance of a particular index, the expenses of managing an iShares ETF are generally lower compared to other forms of retail managed funds. However, brokerage or adviser fees may still apply when buying or selling units of an iShares ETF.

• Receipt of income: You will generally receive income from your investment in the form of distributions. Distributions may include dividends, coupons and other income. There may be years in which no distributions are made.

• Accessibility: iShares ETFs can offer a cost-effective way to gain exposure to a diversified portfolio of securities. They can be less costly than purchasing a large number of individual securities as there are less trading costs and they offer lower thresholds than an investor might otherwise be able to afford.

About the Fund

The fund aims to provide investors with the performance of an index, before fees and expenses (including the cost of hedging), composed of investment grade corporate fixed rate bonds issued by corporations in emerging and developed markets worldwide (hedged to Australian dollars). 

The index, the Bloomberg Barclays Global Aggregate Corporate Bond Index (AUD Hedged), provides a broad-based measure of the Australian dollar hedged performance of the global investment grade corporate fixed-rate debt market.

Why IHCB?

1. Simple, low-cost exposure to global investment grade corporate bonds, spanning multiple countries and sectors 
2. Use at the core of your portfolio to seek stability and pursue diversified sources of income 
3. Gain international exposure while seeking to minimise the impact of Australian dollar volatility on your returns

How we invest your money

The Fund seeks to achieve its objective by tracking the performance of the Bloomberg Barclays Global Aggregate Corporate Bond Index (Total Return, Hedged to AUD) (referred to as the Index).

We believe that an optimisation investment strategy is the most appropriate investment strategy to track the performance of the Index as it takes into account liquidity and transaction cost impact and overall risk relative to the Index. An optimisation investment strategy will be used to achieve similar returns to the Index. Optimisation is an indexing strategy that involves investing in a representative sample of securities that collectively has an investment profile similar to that of the Index. The securities selected are expected to have, in aggregate, investment characteristics (based on factors such as market capitalisation and industry weightings), fundamental characteristics (such as return variability, duration, maturity, credit ratings and yield) and liquidity measures, similar to those of the Index. Therefore, the securities to which the Fund is exposed may or may not include all of the securities in the Index and the weighting of the securities held by the Fund may differ to the weighting of securities in the Index.

The Fund implements its optimisation investment strategy through an investment in the iShares Global Corp Bond UCITS ETF (referred to as the Underlying Fund), an Irish domiciled iShares ETF that aims to track the performance of a non- Australian dollar hedged version of the Index. Refer to the section of the PDS titled "The Underlying Funds for further information on the Underlying Fund.

The Fund applies a passive currency hedge, which seeks to minimise the effect of currency fluctuations on returns by converting the currency exposure of the Index back to Australian dollars. Refer to the section of the PDS titled "Currency hedging for further information.

What does the Fund invest in?

The Fund is generally exposed to the securities that form the Index, including fixed rate corporate bonds issued by corporations in emerging and developed markets worldwide that will, at the time of purchase, comply with the credit rating requirements of the Index, which is investment grade.

While it its intended that the corporate bonds to which the Fund is exposed will comprise investment grade issues, issues may be downgraded in certain circumstances from time to time. In such event, the Fund may be exposed to non-investment grade issues until such time as such non-investment grade issues cease to form part of the Index (where applicable) and it is possible and practicable to liquidate the position.

The Fund may also be exposed to securities that are not constituents of the Index, including government bonds, where such securities provide similar performance (with matching risk profile) to certain securities that make up the Index. However, from time to time the Fund may be exposed to all constituents of the Index.

The Fund obtains exposure to the aforementioned securities indirectly, by investing in the Underlying Fund, which invests in such securities.

Generally, the Fund and Underlying Fund may also be exposed to a small allocation of cash (or cash equivalents, that may include other BlackRock Group funds) for cash flow management purposes. The Fund will also invest in forward foreign exchange contracts for currency hedging purposes.

About the Index

The Index provides a broad-based measure of the performance of the global investment grade corporate fixed-rate debt market.

The Index is market capitalisation weighted and consists of bonds issued by corporations in emerging and developed markets worldwide, within the industrial, utility and financial sectors.

For more information please see Section 3 of the PDS