ProShares Offers a German Sovereign Debt ETF

January 31st at 6:00am by Tom Lydon

ProShares, the fourth largest U.S. exchange traded fund provider known for its alternative leveraged and inverse offerings, recently launched a German sovereign debt ETF.

Proshares released the ProShares German Sovereign/Sub-Sovereign ETF (NYSEArca: GGOV), which tries to reflect the performance of the Markit iBoxx EUR Germany Sovereign & Sub-Sovereign Liquid Index. The ETF will hold investment-grade fix-rate debt securities issued from the German government, local governments and government-backed agencies.

No component may be weighted more than 24%, and the sum of the issuers that have a weight of 5% or more will account for less than 50% of the overall fund.

The fund has 33 components, with an average maturity of 5.53 years and an average coupon of 3.52%.

GGOV has a a fee waiver of 0.33% for the first year, so the fund will maintain an expense ratio of 0.45% for the first year, according to the fund prospectus.

“Many investors have fixed-income portfolios concentrated in high credit quality U.S. bonds,” Michael L. Sapir, Chairman and CEO of ProShare Advisors LLC, ProShares’ investment advisor, said in a press release. “This ETF can help these investors manage risk by adding diversification through international bond exposure.”

German bund futures rose for the week ended Jan. 27 as the Federal Reserve announced it will keep rates low until late 2014 and on uncertainty over the Greek debt talks.

Investors may also gain exposure to German debt through investments like the new PIMCO Germany Bond Index Fund ETF (NYSEArca: BUND) or the exchange traded note Powershares DB German Bund Futures ETN (NYSEArca: BUNL).

For more information on Germany, visit our Germany category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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