Market Leading Custodian and Industry Veterans Join Forces to Innovate the Fixed Income ETF market

January 18, 2022
  • BBH earned a full-service mandate from BondBloxx for its ETF business and will provide custody, administration, accounting, and transfer agency services
  • BondBloxx intends to launch 7 industry sector high yield bond funds which will track ICE US High Yield indexes

Boston, MA, January 18, 2022 – Brown Brothers Harriman & Co. (BBH), a market leading ETF custodian and administrator, and BondBloxx Investment Management Corporation, the first ETF issuer focused solely on the needs of fixed income investors, announced their strategic partnership. BBH will provide custody, administration, accounting, and transfer agency for BondBloxx’s upcoming initial product launch.

“ETFs provide investors easy access to fixed income exposure in a low cost and tax efficient structure.” said Shawn McNinch, Head of ETF Servicing at BBH. “We are proud to partner with BondBloxx’s highly experienced leadership team on this innovative milestone.”

BondBloxx brings together a team of ETF industry pioneers, led by founders Leland Clemons, Joanna Gallegos, Elya Schwartzman, Mark Miller, Brian O’Donnell and Tony Kelly, who have collectively launched over 350 ETFs, including some of the largest bond ETFs on the market today, at leading firms including BlackRock, J.P. Morgan, Goldman Sachs, State Street, Northern Trust and HSBC.

BBH’s most recent Global ETF Survey identified a significant growth opportunity for fixed income ETFs within the larger ETF market, with 66% of investors planning to increase their fixed income ETF allocations, and 42% saying they had bought fixed income ETFs during periods of heightened volatility where the ETF offered transparency and liquidity compared to the individual bonds. Bond ETFs currently hold $1.25 trillion in assets under management, less than 20% of total ETF industry assets.

"The bond market is evolving, with innovations in price transparency and electronic trading that have set the table for a step-change in the evolution of fixed income ETFs," said BondBloxx co-founder Joanna Gallegos. “BBH has demonstrated their commitment to innovation and supporting the fixed income ETF space, and we are excited to establish a strategic partnership that will harness our collective knowledge and expertise.”

The initial BondBloxx funds, which track sector-specific subsets of the ICE BofA US Cash Pay High Yield Constrained Index, are the first ETFs that will enable investors to access industry sectors across the US high yield market.

About BondBloxx Investment Management, Corporation

BondBloxx Investment Management Corporation (“BondBloxx”), a registered investment adviser, is the first ETF issuer focused solely on addressing the needs of fixed income investors. BondBloxx will seek to design and launch ETFs that offer precise market exposures to fixed income asset classes. For more information, go to BondBloxxETF.com.

This shall not constitute or serve as an offer to sell products or services in any country or jurisdiction by BondBloxx. For informational purposes only. All information is given in good faith and without warranty and should not be considered investment advice or an offer of any security for sale.

Carefully consider the Funds’ investment objectives, risks, charges, and expenses before investing. This and other information can be found in the Funds’ prospectus or, if available, the summary prospectus, which may be obtained by visiting bondbloxxetf.com. Read the prospectus carefully before investing.

There are risks associated with investing, including possible loss of principal. Fixed income investments are subject to interest rate risk; their value will normally decline as interest rates rise. Fixed income investments are also subject to credit risk, the risk that the issuer of a bond will fail to pay interest and principal in a timely manner, or that negative perceptions of the issuer’s ability to make such payments will cause the price of that bond to decline. Investing in mortgage- and asset-backed securities involves interest rate, credit, valuation, extension and liquidity risks and the risk that payments on the underlying assets are delayed, prepaid, subordinated or defaulted on.

Distributor: Foreside Fund Services, LLC.

About Brown Brothers Harriman 
BBH is a privately held financial institution that has been a thought leader and solutions provider for over 200 years. The firm serves individuals, families, businesses and institutions in its three business lines: Private Banking, Investment Management, and Investor Services. BBH’s culture of accountability fosters deep and lasting relationships built on commitment, adaptability and trust. The company is independent, selective, and specialized by design.

BBH’s Investor Services business provides cross-border custody, accounting, administration, execution and technology services to many of the world’s leading asset managers and financial institutions. With deep ETF product expertise, BBH works with both experienced ETF managers and new, innovative market entrants to introduce and grow their ETF products. BBH helps asset managers launch, list, and cross-list ETFs across the globe. In early September 2021, BBH announced that it had reached an agreement to sell its Investor Services business to State Street Bank and Trust Company. The deal is expected to close, subject to regulatory approvals and customary closing conditions, by the end of the first quarter 2022.

BBH operates its global business out of seventeen offices located in New York, Beijing, Boston, Charlotte, Chicago, Dublin, Grand Cayman, Hong Kong, Jersey City, Kraków, London, Luxembourg, Nashville, Philadelphia, Tokyo, Wilmington and Zürich. For more information, please visit www.bbh.com.

Brown Brothers Harriman & Co. (“BBH”) may be used as a generic term to reference the company as a whole and/or its various subsidiaries generally. This material and any products or services may be issued or provided in multiple jurisdictions by duly authorized and regulated subsidiaries. This material is for general information and reference purposes only and does not constitute legal, tax or investment advice and is not intended as an offer to sell, or a solicitation to buy securities, services or investment products. Any reference to tax matters is not intended to be used, and may not be used, for purposes of avoiding penalties under the U.S. Internal Revenue Code, or other applicable tax regimes, or for promotion, marketing or recommendation to third parties. All information has been obtained from sources believed to be reliable, but accuracy is not guaranteed, and reliance should not be placed on the information presented. This material may not be reproduced, copied or transmitted, or any of the content disclosed to third parties, without the permission of BBH. All trademarks and service marks included are the property of BBH or their respective owners. © Brown Brothers Harriman & Co. 2022. All rights reserved.

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