Solactive AG has launched the Solactive 1-3 month US T-Bill Index, which is being used to underlie the FinEx Cash Equivalents UCITS ETF, the first money-market exchange traded fund in Russia.
The ETF has cross-listed in Moscow having previously listed in Dublin.
Treasury bills (T-bills) are short-term debt obligations backed by a government with a maturity of up to one year. They are purchased for a price that is less than their face value; and the holder gets the full value back when they mature. T-bills are one of the few money market instruments both easily accessible and affordable to retail investors, thus a popular vehicle in the bond space. T-bills make up 13.2 per cent of the USD11.6 trillion in marketable debt outstanding.
The Solactive 1-3 month US T-Bill Index has been designed to follow the T-Bill market denominated in USD. To be eligible in the Index, the USD-denominated T-Bills must have a time to maturity of one to three months, be issued by the US government and have an amount outstanding of at least USD250 million.
A currency hedged feature is embedded in the index via forward contracts. As of 14 May 2014, the Solactive 1-3 month US T-Bill index had nine components for a performance of 0.34 per cent (unhedged USD) and 26.08 per cent (hedged version) – based on back tested historical data since 31 December 2009.
Astrid Ludwig, head of the bond & complex team at Solactive, says: “The Solactive 1-3 month US T-Bill Index is a great tool to follow the US government bond market in a context of expected rising interest rates as announced by the Fed recently. We are delighted that this index is being used by the first money market ETF in Russia.”
Martin Bednall, managing director of ETFs at FinEx Capital Management, says: “The launch of the FinEx Cash Equivalents UCITS ETF provides the perfect solution to the needs of many Russian investors. Backed by AAA assets, a ruble investor can access high returns with maximum liquidity. This product really does open up the capital markets to all Russian investors looking for a safe place to hold their cash. For non-ruble investors this product is the first European ETF to offer a pure play on the Russian ruble.”
