WisdomTree has launched a short-term bond exchange traded fund to help investors potentially enhance yield generation and diminish interest rate risk by targeting the shorter end of the U.S. Aggregate Bond universe.
On Friday, WisdomTree rolled out the WisdomTree Barclays Yield Enhanced U.S. Short-Term Aggregate Bond Fund (BATS: SHAG). SHAG comes with a 0.12% expense ratio.
“Through its relationship with Bloomberg Barclays as index provider, WisdomTree helped develop an approach for SHAG that draws on the same investable universe as the Bloomberg Barclays U.S. Aggregate Index (the Agg) but focuses on ways to reduce interest rate risk while at the same time boosting yield potential. As a result, this approach may serve as a powerful tool for investors seeking to navigate the opening stages of a rising rate environment,” according to a WisdomTree note.
SHAG will try to track the price and yield performance of the Bloomberg Barclays U.S. Short Aggregate Enhanced Yield Index, which captures the short-term U.S. investment-grade, fixed income securities market while seeking to enhance yield within desired risk parameters and constraints, according to a prospectus sheet. As of May 1, the Short Agg Enhanced Yield provided a yield of 2.18%.