Enhance Yield, Dial Down Rate Risk with WisdomTree's New Bond ETF

The underling index is comprised of subgroups of the Bloomberg Barclays U.S. Aggregate Index, covering Treasuries, agencies, credit and securitized, with effective maturities generally shorter than five years – the ST Agg universe has historically had a duration of between two and three years.

The benchmark also uses a rules-based approach to re-weight subgroups to achieve higher yields and underweights low-yielding securities Treasuries, while managing risk through constraints on expected tracking error and turnover, as well as sector, duration, and credit exposure relative to the ST Agg Universe.

“In a market environment where every basis point counts, overweighting treasuries might not be your first stop on the road to income,” Kevin Flanagan, Senior Fixed Income Strategist at WisdomTree, said in a note. “SHAG may serve as a powerful tool for investors seeking to navigate a potential rising rate environment.”

For more information on new fund products, visit our new ETFs category.