Solactive USD China Corporate High Yield Bond Index will be used as an underlying for the new KraneShares China Junk Bond ETF.
The Solactive USD China Corporate High Yield Bond Index will be used as an underlying for the latest KraneShares CCBS China Corporate High Yield Bond USD Index ETF (KCCB), the firm writes.
A main driver for this ETF has been the increasing demand of high yield by USD investors. Solactive writes that due to the growing size of bond issuance in China, and the continuous growth opportunities provided by this market, the fund is an interesting vehicle to gain exposure to high yielding assets with a low correlation to US and global markets.
Focusing on high returns, the underlying of this ETF selects the highest yielding USD bonds per issuer with a remaining time to maturity between two and five years issued by Chinese companies. In order to qualify as a high yielding bond, it needs to have a high yield rating assigned by either Fitch Ratings or Moody’s or have no rating at all.
Timo Pfeiffer, Head of Research at Solactive, says: “The Chinese market never stops impressing us. As the market creates more growth opportunities, it is important to gain access to investment vehicles that allow us to participate in such growth. KraneShares has shown to have an important focus on Asia, and more specifically on China. This has translated into an improved know-how which should be leveraged by anyone interested in accessing this impressive market.”