Deutsche adds USD high-yield corporate bond ETF to fixed income suite

Feb 15th, 2018 | By | Category: Fixed Income

Deutsche Asset Management has expanded its fixed income ETF range with the listing of the db x-trackers USD High Yield Corporate Bond UCITS ETF (XUHY LN) on London Stock Exchange and Deutsche Börse.

Deutsche adds USD high-yield corporate bond ETF to fixed income suite

Deutsche has over 50 funds in its suite of fixed income ETFs.

The fund tracks the Bloomberg Barclays US High Yield Very Liquid Index, a member of the Bloomberg Barclays High Yield Very Liquid Bond Index family, using physical replication.

The index tracks a subset of bonds from the parent Bloomberg Barclays US Corporate High Yield Index that is more liquid and includes bonds which are issued by financial, utility and industrial institutions that meet specific maturity, credit rating and liquidity requirements.

The index consists of approximately 640 sub-investment grade bonds all of which are denominated in US dollars and issued by corporate issuers.

Blanca Koenig, Deutsche AM fixed income ETF strategist, commented, “Investors continue to look for higher-yielding bond exposures as well as monitor interest rate sensitivity. The new USD high-yield ETF, with a yield of around 6% per annum and a relatively low duration of 4.1, expands the toolkit available to investors to address today’s market challenges. The ETF complements the existing Xtrackers EUR high-yield offering as well as the existing USD bond ETF providing exposure to Treasuries, investment-grade corporates and USD emerging market bonds.”

The ETF’s total expense ratio (TER) is 0.35%. It trades in US dollars on LSE and in euros on Deutsche Börse.

Deutsche AM has an extensive range of over 50 fixed income ETFs plus additional currency-hedged share classes. Approximately two-thirds of the range uses direct, physical replication.

The largest ETF in Europe to track the US dollar-denominated high yield market is the iShares $ High Yield Corp Bond UCITS ETF (IHYU LN) which has $3.8bn in assets under management and a TER of 0.50%.

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