Invesco’s (NYSE: IVZ) PowerShares unit, the fourth-largest U.S. issuer of exchange traded funds, will introduce the PowerShares LadderRite 0-5 Year Corporate Bond Portfolio on Wednesday Sept. 10.
The new ETF will trade on the NASDAQ Stock Market under the ticker LDRI.
“The PowerShares LadderRite 0-5 Year Corporate Bond Portfolio seeks to track the NASDAQ LadderRite 0-5 Year USD Corporate Bond Index (LadderRite Index), which is comprised of investment-grade corporate bonds with maturities of five years or less. The LadderRite index uses a rules-based index methodology that has the potential to reduce turnover and transaction costs and provide a more efficient means of managing interest rate volatility while maintaining a consistent maturity profile,” said PowerShares and NASDAQ in a statement.
LDRI, which qualifies as a strategic beta fixed income offering, could be a new option for investors concerned about rising interest rates to consider due to the ETF’s lower duration and laddering approach.
Only dollar-denominated bonds issued by companies in the U.S., Canada, Japan and Western Europe are eligible for inclusion in the NASDAQ LadderRite indices, according to NASDAQ. Bonds must have a minimum credit rating of BBB- to be included.