BlackRock Sets 180.21 Cents Distribution for iShares U.S. Treasury Bond ETF
BlackRock Investment Management announces an estimated 180.21 cents per unit distribution for its iShares 20+ Year U.S. Treasury Bond (AUD Hedged) ETF for the June 2025 period, primarily sourced from foreign income.
- Estimated cash distribution of 180.211782 cents per unit for June 2025
- Distribution predominantly from foreign sourced income (99.9%)
- No Australian sourced income or franking credits included
- Details provided to assist withholding tax obligations for non-resident unitholders
- Final tax components to be disclosed in annual AMIT member statement
Distribution Overview
BlackRock Investment Management (Australia) Limited has announced the estimated distribution components for the iShares 20+ Year U.S. Treasury Bond (AUD Hedged) ETF (ASX – ULTB) for the period ending 30 June 2025. Investors can expect a cash distribution of approximately 180.21 cents per unit, payable on 11 July 2025. This announcement provides clarity on the composition of the distribution, which is crucial for both resident and non-resident investors in managing their tax obligations.
Foreign Income Dominates Distribution
The breakdown reveals that nearly all of the distribution; 99.9%; is derived from foreign sourced income. This aligns with the fund’s focus on long-term U.S. Treasury bonds, which generate income primarily outside Australia. Notably, there is an absence of Australian sourced income components and no franking credits, reflecting the nature of the underlying assets and the fund’s investment strategy.
Tax Implications for Investors
BlackRock’s announcement serves a dual purpose – it informs investors of expected income and assists intermediaries and non-resident unitholders in understanding withholding tax obligations under Australian tax law. The fund operates as an Attribution Managed Investment Trust (AMIT), meaning that the final tax components will be detailed in the annual AMIT member statement issued after the financial year-end. This statement is essential for investors to accurately report income and claim any applicable tax offsets.
Context and Investor Considerations
For Australian resident investors, the lack of franking credits means the distribution is largely treated as foreign income, which may have different tax consequences compared to dividends from Australian companies. Non-resident investors should pay particular attention to the withholding tax guidance provided, as the fund payment amount includes Australian sourced income components subject to withholding tax. BlackRock’s detailed disclosure helps ensure compliance and transparency in this complex area.
Looking Ahead
While this announcement sets expectations for the June 2025 distribution, investors should await the full AMIT member annual statement for definitive tax details. Given the fund’s exposure to U.S. Treasury bonds and currency hedging, future distributions may fluctuate with global interest rates and currency movements, factors that investors will want to monitor closely.
Bottom Line?
Investors should watch for the final tax statements and remain alert to how global bond markets might influence future distributions.
Questions in the middle?
- How might changes in U.S. interest rates affect the ETF’s future income distributions?
- What are the potential withholding tax impacts for non-resident investors given the foreign income dominance?
- Will currency hedging costs or benefits materially influence upcoming distribution amounts?
