Introducing Factors to Fixed Income ETFs

Many investors are acquainted with factor-based strategies in the equity space, but now there is a nascent expansion of smart-beta exchange traded funds to potentially help enhance returns and reduce volatility in the fixed-income segment.

On the upcoming webcast, Introducing Factors to Fixed Income ETFs, Salvatore Bruno, Chief Investment Officer and Managing Director of IndexIQ, and James “J.R.” Rieger, Head of Fixed Income Indices at S&P Dow Jones Indices, will explore the changing fixed-income environment and introduce factors that may potentially improve risk-adjusted returns in a bond portfolio.

For example, IndexIQ has recently added a number of ETFs for a smarter core bond portfolio allocation, including the IQ S&P High Yield Low Volatility Bond ETF (NYSEArca: HYLV), IQ Enhanced Core Bond U.S. ETF (NYSEArca: AGGE) and IQ Enhanced Core Plus Bond U.S. ETF (NYSEArca: AGGP).

HYLV is a rules-based, fixed income ETF that specifically tries to target lower volatility exposure in high yield debt. The ETF seeks to capture a large portion of the attractive yield offered by high yield bonds, while reducing the volatility with the riskiest credits.