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FinEx ETF, a division of international investment manager FinEx Group and a leading provider of exchange-traded funds to the Russian market, has introduced a US dollar share class for its Russian corporate Eurobond ETF.
Listed on the Moscow Exchange, the FinEx Tradable Russian Corporate Bonds UCITS ETF (FXRU) provides dollar-based investors with access to shorter maturity liquid bonds issued by Russian non-sovereign issuers.
The fund tracks the performance of the Barclays EM Tradable Russian Corporate Bond (EMRUS) Index, which was the first international benchmark covering the Russian corporate Eurobond (international bonds denominated in non-local, i.e. non-Ruble, currencies) market.
Securities issued by domestic Russian quasi-sovereign and corporates are eligible for the index, with a maximum of three bonds per issuer. Issuer caps and floors are applied to enhance diversification. Duration of the bonds ranges from 18 months to five years. The index currently includes 28 securities of 18 leading Russian companies.
The index is denominated in US dollars. As such, the Ruble-denominated share class which was launched on the Moscow Exchange in April 2013 is hedged against the dollar.
Evgeny Kovalishin, President and CEO at FinEx Plus, said: “This is the first ETF on the Moscow Exchange to offer shares in both Ruble-hedged and US Dollar classes. This ETF gives investors a unique opportunity to invest at a low threshold in first-tier Russian corporate Eurobonds, securing income in either Dollars or Rubles.”
The fund was initially listed on the Irish Stock Exchange and then on the London Stock Exchange. It currently has assets of about $12.4 million and was the first ETF to be cross listed in Russia. Accumulated coupon interest will be reinvested by the fund and then paid to the shareholders in the form of dividends twice a year.
It has a total expense ratio of 0.50%.