ClearShares Adds Alternative Bond ETF for Rising Rates

ClearShares added its second actively managed ETF that tracks repurchase agreements, or repos, to help fixed-income investors better diversify their bond exposure.

The recently launched ClearShares Ultra-Short Maturity ETF (NYSEArca: OPER) comes with a 0.30% expense ratio.

The active ETF will be managed by Mark N. Hong, Managing Director; Jonathan M. Chesshire, Managing Director; and Eric J. Blasberg, Director.

The ClearShares Ultra-Short Maturity ETF will try to generate current income by investing in repurchase agreements collateralized by U.S. government securities, according to the fund prospectus.

A repurchase agreement is a type of agreement under where the fund acquires a financial instrument, such as a debt security issued by the U.S. government, from a seller. At the time of purchase, the seller agrees to repurchase the underlying security at a mutually agreed-upon price on a designated future date – normally, the next business day. The securities acquired will generally have a total value in excess of the repurchase agreement’s value and will be held by the fund’s custodian until the securities are repurchased. Investors may think of repurchase agreements as a loan collateralized by securities.