Zurich Life Indexed Eurozone Government Bond (BlackRock)

The Indexed Eurozone Government Bond Fund (BlackRock) aims to give investors exposure to the euro-denominated EMU government bond market. It does this by investing in the iShares Euro Government Bond Index Fund, which is managed by BlackRock. In practice, that means it holds government bonds from eurozone countries rather than shares or corporate bonds.

The Indexed Eurozone Government Bond Fund (BlackRock) uses an indexed approach, so it seeks to follow a market index rather than try to beat it. The underlying iShares Euro Government Bond Index Fund is passively managed and aims to track an index, although it will not match it exactly. This means investors should expect the fund to move broadly with the euro government bond market, but not identically.

The Indexed Eurozone Government Bond Fund (BlackRock) has exposure across several eurozone government bond markets, including France, Italy, Germany, Spain, Belgium, the Netherlands, Austria, Portugal, Finland and Ireland. It may also hold cash and derivatives alongside those bond positions. Derivatives are financial contracts whose value is linked to another asset, and they can be used to help manage the portfolio.

The Indexed Eurozone Government Bond Fund (BlackRock) is structured as a ‘two stage switch’ fund. That means the investor’s money is moved through a switching mechanism rather than being held directly in the underlying bond fund in a single step. Full details of how that works are stated in the policy document or can be obtained from Zurich Life.

The Indexed Eurozone Government Bond Fund (BlackRock) may suit an investor who wants broad exposure to eurozone government bonds through a passive, indexed approach. It is focused on bonds rather than higher-risk equities, so it may appeal to someone looking for government bond market participation. As a bond fund, it is exposed to interest rate risk, which means bond values can fall when interest rates rise.