Amplify is revamping the Amplify YieldShares Prime 5 Dividend ETF (BATS: PFV) to an exchange traded fund strategy based on closed-end funds investing in floating rate senior loans and other floating rate instruments.

PFV will no longer be trading under its current appellation and ticker at around August 29 when the dividend ETF will be changed into the Amplify YieldShares Senior Loan and Income ETF (BATS: YESR).

According to a Securities and Exchange Commission filing, YESR will try to reflect the performance of the Prime Senior Loan and Income CEF Index, which is designed to measure the performance of closed-end funds that invest in floating rate senior loans or other floating rate debt instruments, pay dividends and are listed in the U.S.

The index ranks its CEF components based on distribution rate at 40%, which is calculated by dividing the sum of the CEF’s trailing 12-month distribution paid by the share price at the time of calculation; premium/discount rate at 40%, which is calculated by CEF share price premium/discount to net asset value; total expense ratio at 10%, which is defined as the total annual fund operating expenses; and lastly, liquidity value at 10%, which is defined by the average daily value of shares traded over the prior three-month period.

A closed-end fund has a set number of shares after raising initial capital through an IPO. Shares are not created or redeemed based on market demand, but rather shares are purchased or sold within the market. The CEF’s share price reflects that demand. Consequently, due to the static number of shares and changing demand, a CEF may trade at a wide premium or discount to its net asset value.

Related: A New Yield-Generating, Institutional-Level ETF Play

A senior loan is a private loan taken from an underwriting bank or a syndicate of lenders. The loans are secured in that they are backed by the borrowers’ assets, which act as collateral. If the borrower defaults, lenders have a senior claim on the defaulters’ assets. Moreover, senior secured floating-rate loans have, as their name suggests, a floating interest rate component, which fluctuates with market rates.

Since rates are typically reset once per quarter, senior loans typically have low durations – a measure of a bond fund’s sensitivity to changes in interest rates. The floating-rate component also offer investors an alternative method of earning yields while mitigating interest-rate risk. Consequently, bank loans are seen as an attractive substitute to traditional corporate debt in a rising rate environment.

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