Another new smart beta bond offering is the NuShares Enhanced Yield 1-5 Year U.S. Aggregate Bond ETF (NYSEArac: NUSA).
The smart beta bond ETF will largely include U.S. dollar-denominated investment-grade taxable debt securities with remaining term to final maturity of less than five years and at least one year until final maturity.
NUSA will help provide investors with “enhanced yield potential relative to the short-term, taxable investment grade fixed income market with comparable risk, a diversified core allocation in an income portfolio and exchange-traded liquidity and transparency,” according to Nuveen.
“Investors must consider how market dynamics affect smart-beta ETFs. A high-credit-quality ETF will lag behind in a bull market like today’s, as overleveraged cyclical companies rally,” according to Barron’s.
Other new smart beta bond ETFs include the 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.
For more information on new fund products, visit our new ETFs category.