Market Vectors Index Solutions (MVIS) has launched the Market Vectors US Treasury-Hedged High Yield Bond Index, expanding MVIS’s current bond index exposure consisting of Market Vectors Renminbi Bond Index and Market Vectors US Investment Grade Floating Rate Index.
“After years and years of declining US interest rates, many investors have begun to contemplate what to do when the tide turns and interest rates rise,” says Lars Hamich, chief executive at MVIS. “We therefore believe that the Market Vectors US Treasury-Hedged High Yield Bond Index benchmarks a segment of particular interest to investors. The combination of long and short components results in an index that tracks the marriage of these two investment goals: participation in high yield and interest rate protection.”
Market Vectors US Treasury-Hedged High Yield Bond Index tracks the performance of long positions in below-investment grade corporate bonds denominated in US Dollars and an equivalent US Dollar amount of short positions in US Treasury notes.
Bonds in the long position must have below-investment grade ratings. Included in the index are only securities that have a minimum of 12 months remaining to maturity, a fixed coupon schedule and a minimum amount outstanding of USD500m.
The index includes bonds where the issuer of the bonds is incorporated in the US. Market Vectors US Treasury-Hedged High Yield Bond Index is calculated as total return index and is rebalanced monthly.