DWS Xtrackers has launched an ETF providing ultra-short duration exposure to the US Treasuries market.The Xtrackers US Treasuries Ultrashort Bond UCITS ETF has listed on the London Stock Exchange and Germany’s Xetra stock exchange, and provides US dollar ultra-short duration exposure. It is expected to appeal especially to institutional investors that require bond exposure but with very low duration risk (the risk of changes in borrowing rates negatively impacting the market value of a bond investment in the time before maturity).
Olivier Souliac, DWS’s Head of Passive Index Strategy & Analytics, says: “We aim to offer our clients a full range of fixed income exposures to meet all their asset-allocation needs. This new ETF, which provides long US Treasury bond exposure but with ultrashort duration risk, provides investors with a low interest rate risk but improved yield alternative to cash.”
The ETF tracks the FTSE US Treasury Short Duration Index, which references 67 fixed-rate and floating rate US Treasury Securities and T-Bills and has a yield-to-maturity of 0.12 per cent (as at 01/09/20, Source: FTSE Russell). It has an annual all-in fee of 0.07 per cent.