Duration is a measure of the fund’s sensitivity to changes in interest rates. A low duration typically corresponds with a lower interest rate risk. Interest rates have an inverse relationship to bond prices – rising rates translates to falling bond prices. HYHG achieves a near negligible duration by taking short positions in Treasury securities. [A High-Yield Bond ETF for Rising Rates]
To be included in HYHG, bonds must be issued by U.S. or Canadian firms with a minimum size of $1 billion and at least one year remaining until maturity. The maximum credit rating on the Standard & Poor’s scale allowed by the ETF is BB+.
ProShares High Yield-Interest Rate Hedged ETF
ETF Trends editorial team contributed to this post.