Cathay launches short-term US Treasury ETF in Taiwan

Nov 25th, 2019 | By | Category: Fixed Income

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Cathay Securities, a division of Cathay Financial Holdings, has launched a new ETF in Taiwan providing investors with exposure to short-term US Treasury securities.

Cathay launches short-term US Treasury ETF in Taiwan

The fund is the first ETF in Taiwan to provide exposure to short-term securities issued by the US Treasury.

The Cathay Bloomberg Barclays US Short Term Treasury ETF (00865B TT) has listed on Taiwan Stock Exchange and comes with an expense ratio of 0.14%.

The fund is linked to the Bloomberg Barclays US Treasury Coupons Index which consists of US dollar-denominated, fixed-rate, nominal debt issued by the US Treasury.

Eligible securities must have a remaining maturity between one and twelve months.

Inflation-linked bonds, floating-rate bonds, STRIP bonds, and Treasury bills are excluded.

The fund becomes the first Taiwan-listed ETF to track short-term US Treasury securities. The only other Taiwanese ETFs to offer exposure to US Treasuries are inverse and leveraged (x2) products focused on the long-end of the yield curve, products issued by Cathay Securities and Yuanta Securities.

The new fund complements the issuer’s Cathay FTSE Chinese Government and Policy Bank Bond 0-1 Year Select ETF (00732 TT), which provides exposure to short-term, renminbi-denominated bonds issued by the Chinese government or state-owned policy banks. This fund comes with an expense ratio of 0.33%.

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