WisdomTree on Thursday debuted a new aggregate bond ETF that sets out to be a simple and cost-effective way to access multiple economies, interest rates and yield curves with the prospect of higher return potential and lower absolute risk than domestic bond markets alone.
The WisdomTree Yield Enhanced Global Aggregate Bond Fund (GLBY) launched on the NYSE Arca Exchange with an expense ratio of 0.20%.
Rick Harper, WisdomTree Head of Fixed Income, said the fund is ideal for investors looking to enhance yield or seeking diversification through global fixed income.
The WisdomTree Yield Enhanced Global Aggregate Bond Fund tracks the underlying index which employs a systematic methodology to enhance potential yield at the sector and global level by taking advantage of opportunities that exist between currency blocks and abiding by disciplined risk constraints.
The Index:
- Deconstructs the Bloomberg Barclays Global Aggregate Index into distinctive maturity and sector investment buckets for each of the major currency exposures;
- Re-weights sector and maturity buckets within each currency block to enhance yield, while adhering to disciplined risk constraints on tracking error, duration and sector exposure;
- Re-weights currency blocks to enhance net yield, while adhering to a set of disciplined constraints on tracking error and risk;
- And hedges the bond cash flows back to U.S. dollars to mitigate currency risk.
This process results in distinct potential benefits when compared to market-capitalization weighted indexes, such as a greater balance between corporate and government debt exposures globally and an enhanced tradeoff between yield potential and interest rate risks.
This launch is an extension of WisdomTree’s yield enhanced fixed income offerings, which includes the WisdomTree Yield Enhanced U.S. Aggregate Bond Fund (AGGY) and WisdomTree Yield Enhanced U.S. Short-Term Aggregate Bond Fund (SHAG). Learn more about the WisdomTree Yield Enhanced Global Aggregate Bond Fund (GLBY) here.
For more new ETF launches, visit our New ETFs category.