In anticipation of a rising rate environment, Deutsche Asset Management rolled out short-term, speculative-grade bond exchange traded funds for fixed-income investors whom want yields but are wary of rate risks.
On Wednesday, Deutsche Asset Management launched the Xtrackers Short Duration High Yield Bond ETF (NYSEArca: SHYL), which comes with a 0.20% expense ratio.
The Xtrackers Short Duration High Yield Bond ETF will try to reflect the performance of the Solactive USD High Yield Corporates Total Market 0-5 Year Index, which is comprised of short-term publicly issued U.S. dollar-denominated, below investment-grade corporate debt, according to a prospectus sheet.
Underlying bond holdings will have to be from issuers with at least $1 billion outstanding face value, have at least $400 million of outstanding face value, have an original maturity date at most 15 years and have less than or equal to five years to maturity. Furthermore, debt issuer weights are capped at 3%.
The new bond ETF holds 170 debt securities, and it covers global issuers from Australia, Belgium, Canada, the Cayman Islands, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Jersey Channel Islands, Luxembourg, Macau, the Netherlands, Norway, Singapore, Sweden, the United Kingdom and the United States. The fund currently holds a hefty 85.5% tilt toward the U.S.
Sector weights include consumer discretionary 15.0%, industrials 12.7%, health care 12.4%, energy 11.7%, financials 7.7%, information technology 7.4%, materials 7.0%, telecom services 6.4% and utilities 2.5%.
Fixed-income investors may also like to know that SHYL distributes payouts on a monthly basis.
For more information on new fund products, visit our new ETFs category.