PIMCO and European provider Source expand on the popular high-yield, short-duration bond strategy with a London-listed, euro-hedged exchange traded fund version.
According to a press release, the PIMCO EUR-hedged Short-Term High Yield Corporate Bond Index Source ETF (LSE: STHE) began trading on the London Stock Exchange Monday, Oct. 21.
The new fund will provide euro-based investors the same exposure to the USD-denominated PIMCO Short-Term High Yield Corporate Bond Index Source ETF (LSE: STHY), while reducing the effects of exchange rate swings between the U.S. dollar and the euro currency. [Another Look at High-Yield Bond ETFs]
STHE has a 0.60% expense ratio, compared to STHY’s 0.55% expense ratio.
STHY’s high-yield, short-duration bond investment has been a popular strategy in Europe, attracting $550 million since its launch in March 2012.
“Short term high yield is a segment of the market which continues to resonate with investors, combining low interest rate risk with enhanced yields,” Howard Chan, ETF product manager at PIMCO, EMEA, said in the press release. “Since launch, we believe that this ETF has delivered both a high level of yield and lower volatility compared to other products in the broad high yield sector.”