PGHY has an effective duration of 1.73 years. The duration is a measure of a bond’s sensitivity to changes in interest rates – bond funds with lower durations would be less sensitive than higher duration bond ETFs.
“Bonds with shorter maturities generally carry less duration risk than bonds with longer maturities and can help investors protect fixed-income portfolios against rising interest rates,” Joseph Becker, senior fixed-income product strategist at Invesco PowerShares, said in the press release “While high-yield bonds generally carry higher credit risk, they also offer investors higher rates of income. We believe today’s exceptionally low interest rates, particularly at the short end of the yield curve, position short-term, high-yield bonds as an attractive investment for income seeking investors.”
The new fund could be competing with iShares Global High Yield Corporate Bond (NYSEArca: GHYG) and other ETFs that invest in international speculative-grade debt. [A Global Approach to High-Yield Bond ETFs]
For more information on new product launches, visit our new ETFs category.
Max Chen contributed to this article.