Fixed-income exchange traded funds were largely in the spotlight throughout 2011 as investors generally turned to them for yield and some degree of stability amid severe volatility in equities last year.
Thus, when specific asset classes in the ETF universe garner assets and attention, innovation and additional product releases are often the next step in the process.
A lightly traded product that debuted last March is currently the best performing fixed-income exchange traded product year to date, PowerShares DB 3X Italian Treasury Bond Futures ETN (NYSEArca: ITLT).
ITLT has rallied an impressive 20.31% year to date and it is now 40% above its intraday low of $12.00 a share touched in early November of last year. However, it should be noted the ETN is designed as a trading vehicle rather than a buy-and-hold product.
ITLT as an ETN is geared to replicate the performance of a long position in Euro-BTP futures on a 3 times leveraged basis. BTPs are are government debt securities issued by Italy.
Obviously, the euro currency has rallied in recent sessions on somewhat of a relief rally, and this has positively affected sovereign European debt issues including those of Italy.
ITLT remains thinly traded, averaging only 7500 shares on an average daily basis, but trading volume has been steadily picking up in the fund as has its asset level (currently about $27 million in AUM).
For those looking to aggressively play a potential European recovery via the Italian bond market, and /or those who may be looking to hedge international debt exposure, ITLT presents a unique, first in class alternative.
PowerShares DB 3X Italian Treasury Bond Futures ETN
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