Last week, Brazil officially eliminated a tax that affected foreign buyers of Brazilian government bonds. The elimination of the tax represents positive news for exchange-traded funds (ETFs) with exposure to Brazilian government debt. And while there isn’t yet a pure-play Brazilian government bond ETF on the market, a number of funds are set to benefit, most notably those that provide access to emerging markets local currency debt.
Deutsche Asset & Wealth Management has announced the launch of two ‘industry-first’ exchange-traded funds (ETFs) on the NYSE Arca: the db X-trackers Municipal Infrastructure Revenue Bond Fund (RVNU) and the db X-trackers Regulated Utilities Fund (UTLT). The new funds offer unique investment opportunities in markets not previously served by ETFs – an increasingly tough ask given the recent explosive expansion of the ETF universe.
iShares, the exchange traded funds (ETF) platform of BlackRock, has announced the expansion of its European-listed corporate bond suite with the launch of the iShares Barclays Euro Corporate Bond Financials UCITS ETF (EUCF) on the London Stock Exchange (LSE). The new ETF provides focused exposure to financial issuers such as banks. Stephen Cohen, Head of Investment Strategy and Insight EMEA at iShares, said: “The new fund provides targeted exposure to this important segment of the bond market in a single trade.”
First Trust Advisors, a global provider of exchange-traded funds (ETFs), has rolled out its fourth actively managed ETF. Listed on the Nasdaq exchange, the First Trust Senior Loan ETF (FTSL) seeks to generate high current income and preserve capital by investing primarily in a diversified portfolio of first-lien senior floating-rate bank loans. The fund attempts to outperform both the S&P/LSTA US Leveraged Loan 100 Index and the Markit iBoxx USD Leveraged Loan Index.
FinEx has launched Russia’s first ever locally listed exchange-traded fund (ETF), the FinEx Tradable Russian Corporate Bonds UCITS ETF (FXRB). The fund has been listed on the Moscow Exchange and provides exposure to shorter maturity liquid Eurobonds issued by Russian non-sovereign issuers. The Moscow listing, which comes just two months after the fund debuted on the Irish and London stock exchanges, will appeal to Russian-based investors seeking convenient access to a liquid diversified domestic corporate bond portfolio.
SPDR ETFs, the exchange traded funds (ETF) platform of State Street Global Advisors (SSgA), has unveiled the world’s first ETF to deliver pure exposure to emerging market inflation-linked debt. Debuting on the Deutsche Börse – additional cross-listings are likely over time – the SPDR Barclays EM Inflation-Linked Local Bond UCITS ETF (SYBI) will appeal to investors looking to diversify emerging market exposure while protecting against inflation. The fund includes inflation-linked sovereign bonds issued by Brazil, Mexico, Chile, South Africa, Poland, Turkey, Israel, South Korea and Thailand.
iShares, the exchange-traded funds (ETFs) business of BlackRock, has launched four iSharesBonds Corporate ex-Financials Term ETFs. The new products, which have a range of defined maturity dates, are designed to offer investors bond-like features with the additional benefits of ETF liquidity, transparency and diversification. While relevant to all investors, the products are expected to appeal to institutional clients, such as bank treasurers, as well as private investors structuring a portfolio in anticipation of a planned retirement date.
State Street Global Advisors (SSgA) has collaborated with GSO Capital Partners, the global credit business of private equity giant Blackstone, to roll out the SPDR Blackstone / GSO Senior Loan ETF (SRLN), the world’s first actively managed senior loan exchange-traded fund (ETF).
Against a backdrop of core interest rate volatility, investors have been moving out of broad and long-term bond ETFs into products focused on shorter-maturity segments, in what Stephen Cohen of iShares calls a “duration rotation”. Several ETF-based strategies are available to investors to mitigate the impact of interest rate risk. One option is the iShares Barclays Euro Corporate Bond Interest Rate Hedged ETF (IRCP), which hedges against interest rate increases by shorting German bund futures.
Van Eck, a US-based sponsor of exchange-traded funds (ETFs), has unveiled the Market Vectors Treasury-Hedged High Yield Bond ETF (THHY). The fund combines the income potential of high-yield corporate bonds with the interest rate-hedging capability offered by shorting Treasury notes. The launch of the fund follows the introduction of the Market Vectors US Treasury-Hedged High Yield Bond Index, the fund’s benchmark, in February this year.