BlackRock’s iShares Global High Yield Bond ETF Declares 33.12 Cents Distribution
BlackRock Investment Management announces an estimated 33.12 cents per unit distribution for its iShares Global High Yield Bond (AUD Hedged) ETF for the June 2025 period, predominantly sourced from foreign income. The detailed tax breakdown aims to assist investors, especially non-residents, in managing withholding tax obligations.
- Estimated cash distribution of 33.122345 cents per unit for June 2025
- Distribution primarily derived from foreign sourced income (99.88%)
- No franking credits or Australian sourced dividends included
- Tax component estimates provided to aid withholding tax compliance
- Final tax details to be confirmed in AMIT member annual statements post financial year-end
Distribution Announcement Overview
BlackRock Investment Management (Australia) Limited has released its estimated distribution components for the iShares Global High Yield Bond (AUD Hedged) ETF (ASX, IHH) for the period ending 30 June 2025. Investors can expect a cash distribution of approximately 33.12 cents per unit, payable on 11 July 2025, reflecting the fund's income generation over the financial year.
Foreign Income Dominates Distribution
Notably, the vast majority of this distribution, 99.88%, is attributed to foreign sourced income. This aligns with the fund’s global high yield bond strategy, which invests predominantly in overseas fixed income securities. Australian sourced income and dividends are negligible or absent in this distribution, and there are no franking credits attached, indicating that the income is largely untaxed at the source in Australia.
Tax Implications for Investors
The announcement provides a detailed breakdown of estimated tax components to assist intermediaries and investors, particularly non-resident unitholders, in managing withholding tax obligations. As the fund operates as an Attribution Managed Investment Trust (AMIT), the final tax components will be detailed in the AMIT member annual statements issued after the financial year-end. This transparency is critical for investors to accurately assess their tax liabilities and entitlements.
Guidance for Non-Resident Investors
For foreign investors, the distribution includes components that may be subject to withholding tax under Australian tax law. The announcement highlights the importance of understanding the “Fund Payment Amount,” which relates to Australian sourced income and capital gains subject to withholding tax. BlackRock cautions intermediaries to consider potential additional withholding tax obligations arising from deemed payments disclosed in the AMIT statements.
Looking Ahead
While this distribution announcement provides clarity on expected income and tax components, investors should await the final AMIT member annual statements for definitive tax details. The fund’s reliance on foreign income and absence of franking credits may influence investor decisions, particularly for those sensitive to tax efficiency. As global market conditions evolve, future distributions may reflect changes in income sources and tax treatment.
Bottom Line?
Investors should monitor the forthcoming AMIT statements closely to understand the final tax implications of this substantial foreign income distribution.
Questions in the middle?
- How might changes in global interest rates impact future distributions of the iShares Global High Yield Bond ETF?
- Will the fund’s reliance on foreign sourced income affect its attractiveness to Australian resident investors seeking franked dividends?
- What are the potential withholding tax rates applicable to non-resident investors receiving these distributions?
