Deutsche Asset & Wealth Management (DeAWM) has listed a suite of three euro-denominated high-yield corporate bond ETFs, including the world’s first ETF providing exposure to the shorter maturity segment of the market.
The db x-trackers II iBoxx EUR High Yield Bond 1-3 UCITS ETF provides exposure to 97 liquid fixed and floating rate sub-investment grade euro-denominated corporate bonds in the one-to-three-year maturity bucket1. The ETF is listed on the Deutsche Börse and has an all-in fee of 0.35% per annum.
Arne Noack, Head of Exchange Traded Product Development, EMEA, says: “In light of the continued strong demand for high-yield bond ETFs, we have scanned the range of products available in the market and identified certain gaps where we see an opportunity to serve investors. We feel these new products are important additions to the euro high-yield ETF market.”
The yield on the ETF’s underlying index, the Markit iBoxx Liquid EUR High Yield 1-3 Index, stands at 3.96% (as at 07/01/2015).
The other two new launches, also on the Deutsche Börse, provide exposure to euro-denominated high-yield corporate debt encompassing the full yield curve – over 400 securities1 – and daily rebalanced inverse (or short) exposure on the same index (see table below). The yield on the former’s underlying index, the Markit iBoxx EUR Liquid High Yield Index, stands at 4.31% (as at 07/01/2015). The short daily ETF is specifically aimed at professional investors and provides a tool for tactical inverse positioning. “In launching a product linked to the Markit iBoxx EUR Liquid High Yield Index our intention is to bring to market the most competitively priced ETF tracking the overall liquid universe of the euro-denominated high-yield bond market,” adds Noack.
The ongoing low interest rate environment has stimulated interest from investors in higher yielding fixed income exposures, while demand for bond ETFs continues to grow. Assets under management in bond ETFs grew by 41 per cent in 20142.