New ETFs for Targeted Exposure to the High-Yield Bond Market

Meanwhile, the Xtrackers Low Beta High Yield Bond ETF tries to reflect the performance of the Solactive USD High Yield Corporates Total Market Low Beta Index, which includes junk-rated debt that exhibits lower overall beta to the broader high-yield bond market. Consequently, the portfolio is comprised of lower-yielding junk bonds that show a lower beta.

“In today’s low interest rate environment, fixed income investors are looking for new sources of yield,” Fiona Bassett, Head of Passive Asset Management, Americas, said in a note. “Our expanded Xtrackers suite of high yield bond ETFs uses rules-based strategies to provide exposure to different levels of credit and interest rate risk, allowing investors to manage credit and duration exposure for a more customized solution. SHYL will allow investors to gain cost efficient exposure specifically to the short duration high yield bonds. In addition, the unique construction methodology of HYUP and HYDW may help investors achieve their desired level of yield and credit risk while maintaining varied exposure to the underlying high yield market.”

The two new ETFs followed the Wednesday launch of the Xtrackers Short Duration High Yield Bond ETF (NYSEArca: SHYL).

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