While investors have been quick to take on China as an emerging market equities play, Chinese yuan-denominated bonds have not been as popular. Consequently, Guggenheim Investments has announced it will be closing down its yuan bond exchange traded fund.
The fund sponsor, though, promises to utilize the freed-up resources to engineer new and innovative ETFs.
“Guggenheim remains committed to its leadership position in the ETF business and engages in a regular and thoughtful review of all of our products to ensure that we are meeting our clients’ needs,” William Belden, managing director for Guggenheim Investments, said in the press release. “ETF closures are a healthy part of the maturation of the industry, and enable providers to free up capital to develop new and innovative product offerings for investors.”
The Guggenheim Yuan Bond fund provides exposure to a basket of investment grade bond securities eligible for investments by U.S. and other foreign investors and denominated in Chinese Yuan. RMB is up 3.8% year-to-date and 3.8% over the past year. The ETF has a 2.0% 30-day SEC yield.
The fund will suspend its May monthly dividend distribution in anticipation of its liquidation.