WisdomTree is proposing and exchange traded fund (ETF) with a bit of a different twist: it’s made up of about 75 closed-end bond funds. If it’s approved, it would be the first ETF of CEFs.
WisdomTree Investments is proposing a closed-end ETF, a fund that would track an index of 75 bond CEFs that invest in taxable U.S. and international issues. The ETF would be named the WisdomTree CEF Fixed-Income Fund, which is awaiting approval from the Securities and Exchange Commission (SEC).
A CEF is a pooled investment fund that issues a limited amount of shares through an initial public offering. Shares are limited and values are determined by the NAV and the underlying share price. Once in awhile, the provider will issue more shares, according to Murray Coleman for Index Universe.
The ETF will hold foreign bonds from both developed and emerging markets, and it would include high-yield and investment-grade bonds.
For more stories about new ETFs, visit our new ETFs category.
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