Additionally, this designation will provide a whole new pool of investment opportunities for ELD. Insurance companies look for yield when they invest the premiums, and ETFs let them buy a basket of bonds rather than researching individual securities.
“This Designation places ELD within the highest credit quality rating category,” Rick Harper, WisdomTree Head of Currency and Fixed Income, said in the press release. “We believe the ratings of our fixed income funds will be instrumental in broadening the pool for assessment and consideration among insurance companies when managing their risk-based capital requirements.”
Additionally, the WisdomTree ELD ETF itself holds a range of bond credit qualities, including AAA 10.9%, AA 6.5%, A 31.2%, BBB 27.2%, BB 10.4% and NR 13.5%. Anything below BBB is considered speculative grade, so the majority of ELD’s holdings are investment grade quality. [Rising Rates Weigh on Emerging Market Bond ETFs]
For more information on fixed-income assets, visit our bond ETFs category.
Max Chen contributed to this article.