Deutsche launches accumulating share class for EUR high yield bond ETF

Mar 21st, 2017 | By | Category: Fixed Income

Deutsche Asset Management, the investment arm of the German banking behemoth, has launched an income-accumulating share class of the db x-trackers II EUR High Yield Corporate Bond UCITS ETF (XHYA) on Deutsche Börse’s Xetra and Frankfurt exchanges. The fund provides access to euro-denominated corporate bonds with credit ratings below investment grade.

Deutsche launches EUR high yield bond ETF on Xetra

The db x-trackers II EUR High Yield Corporate Bond UCITS ETF provides access to euro-denominated corporate bonds with below investment grade credit rating.

The ETF tracks the Markit iBoxx EUR Liquid High Yield Index, a reference for the largest and most liquid euro-denominated corporate bonds from the sub-investment grade segment, issued by companies both within and outside of Europe.

Bonds with a remaining term to maturity between two and 10.5 years and a rating below Baa3/BBB- from a reputable rating agency, are selected for inclusion. Eligible bonds may have either a fixed or variable rate of interest. As of the index’s monthly rebalancing date, maximum weightings are capped at 3% per issuer and 20% per country.

The ETF was initially launched in January 2015 on Deutsche Börse and Borsa Italiana with a policy of distributing income to shareholders (Ticker: XHYG). As of 21 March 2017, the ETF has €327m in assets under management.

The total expense ratio (TER) of the fund is 0.35%.

The ETF broadly competes with two Europe-listed ETFs which also track the euro-denominated high yield bond market. from providers SPDR ETFs and Amundi.

The €400m SPDR Barclays Euro High Yield Bond UCITS ETF (Xetra: SYBJ) tracks the Barclays Liquidity Screened Euro High Yield Bond Index and has a TER of 0.40%.

The €368m Amundi Euro High Yield Liquid Bond iBoxx UCITS ETF (Euro P: AHYD) tracks the Markit iBoxx EUR Liquid High Yield 30 Ex-Financial Index and has a TER of 0.40%.

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