Invesco cross-lists PIMCO euro short-term high yield ETF on SIX

Feb 22nd, 2018 | By | Category: Fixed Income

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Invesco PowerShares has cross-listed the PIMCO Euro Short-Term High Yield Corporate Bond Index Source UCITS ETF (EUHA SW) on SIX Swiss Exchange.

PowerShares cross-lists PIMCO eurozone high yield ETF on SIX

The fund provides exposure to short-term, euro-denominated corporate bonds issued within the eurozone with a rating below investment grade.

The fund, managed by bond specialists PIMCO, tracks the BofA Merrill Lynch 0-5 Year Euro Developed Markets High Yield 2% Constrained Index, comprising short-term, euro-denominated corporate bonds issued within the eurozone with a rating below investment grade.

To be eligible for inclusion in the index, components must have a fixed coupon and an outstanding amount of at least €250 million. The index has an issuer cap of 2%, which is lower than most of its peers and is designed to provide a more diversified portfolio. Emerging market issuers are also excluded from the index, with the aim of providing better downside protection.

Invesco believes the fund will appeal to investors who are seeking higher income than they can get from government or investment grade corporate bonds due to interest rates being near record lows.

Additionally, bonds with shorter maturities should be less sensitive to changes in interest rates than those at the longer end, offering a degree of protection from future interest rate normalisation.

The ETF trades in euros, with income accumulated. A distributing share class is available under the ticker EUHI SW. The ETF is also available to trade on Deutsche Börse and Borsa Italiana.

The fund’s total expense ratio (TER) is 0.44% due to a contractual fee waiver in place until July 2018. Its gross expense ratio is 0.50%.

Invesco has also introduced a euro-hedging share class for the PIMCO Short-Term High Yield Corporate Bond Index Source UCITS ETF on SIX Swiss Exchange. The fund is similar to EUHA in that it invests in short-term high yield corporate bonds but targets the US market. The currency-hedged share class trades under the ticker STEA SW and costs 0.60% in fees.

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