Nuveen debuted the Nuveen ESG High Yield Corporate Bond ETF (NUHY) on Thursday, an ETF designed to offer exposure to high yield corporate bonds, while adhering to the factors concerning ESG (environmental, social, and governance), in addition to CBI (controversial business involvement), and low carbon criteria.
NUHY is the industry’s first high yield corporate bond ESG ETF and complements Nuveen’s existing ETF offering, which is among the most comprehensive suite of ESG ETFs. The fund fills an industry-wide product gap, developed in response to investors’ desire for income in a historically low-yield environment. It will also allow for greater diversification for a portfolio.
We are pleased to continue our tradition of product innovation with the launch of the industry’s first high yield corporate bond ESG ETF,” said Jordan Farris, managing director and head of ETFs at Nuveen.
“The Nuveen ESG High Yield Corporate Bond ETF seeks the dual objectives of offering investors competitive income while remaining consistent with environmental, social, and governance values.”
NUHY and The Index
NUHY will ideally provide investment results, before fees and expenses, similar to those of its primary benchmark, the Bloomberg Barclays MSCI US High Yield Very Liquid ESG Select Index (the “Index”). It will provide exposure to the below-investment-grade taxable fixed-income market while adhering to ESG-focused criteria.
The Index utilizes specific ESG criteria to select from the securities included in the Bloomberg Barclays U.S. High Yield Very Liquid Index (the “Base Index”), which is designed to capture the U.S. dollar-denominated, high yield, fixed-rate corporate bond market.
Related: Large Cap Strategy Added to Nuveen’s Suite of ESG ETFs
The Index draws from the universe defined by the Base Index, which is comprised of U.S. dollar-denominated below investment grade corporate bonds with above-average liquidity. Below-investment-grade bonds are commonly referred to as “high yield” or “junk” bonds.
Getting back to NUHY, some other key highlights are the intraday exchange-traded liquidity, and the fund’s status as a transparent, low-cost investment solution.
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