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.
The increasingly popular small-cap asset class should also get some new players this year. IndexIQ will launch at least three more small-cap ETFs before the years’ end. The new funds will track the economies of Hong Kong and Singapore, as well as a small-cap equity-based agribusiness fund. According to NASDAQ, the country-specific ETFs focus on the bottom 15% of companies in terms of market capitalization. [New Single-Country ETFs.]
The planned small-cap commodity ETF will zero in on natural gas, crude oil and gold, in addition to agribusiness-also will give investors access to smaller companies that represent real growth around the world. [Small-Cap ETFs Are Making a Comeback.]
When all is said and done, IndexIQ hopes to have a total of 13 small-cap ETFs. The remainder are anticipated to come to market next year. [Other Countries IndexIQ Covers.]
Max Chen and Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.