Exchange traded fund (ETF) investors looking for exposure to more high-quality U.S. corporate bonds will soon have a new corporate bond ETF available to play with. Claymore has begun the necessary paperwork with the Securities and Exchange Commission to launch the new ETF.
The Claymore BulletShares 2014 Corporate Bond ETF (BSCE) will try to reflect the investment results that correspond to the performance of an investment- grade corporate bond index called the BulletShares USD Corporate Bond 2014 Index, according to ETF Daily News. The fund will have an expense ratio of 0.24%.
The 2014 Index is a rules-based index made up of around 187 investment-grade corporate bonds that mature on or about Dec. 31, 2014. The fund will make a cash distribution to then-current shareholders after accounting for any liabilities of the fund. During the last year, as bonds mature, the fund’s portfolio will switch to cash and cash equivalents.
Around 80% of the fund’s total assets will be in component securities in the 2014 index and other investments that are substantially identical to component securities.
The Trust’s Board of Trustees may change the termination date to an earlier or later date if the changes are deemed best for the fund. The Board may also change the fund’s investment strategy and other policies without shareholder approval.
BSCE will utilize a sampling approach – the investment advisor will use quantitative analysis to select a sample of securities that resemble the Index. Additionally, securities may be removed or added to more accurately mirror the Index.