Lyxor rolls out three fixed income ETFs on Borsa Italiana

Jul 18th, 2017 | By | Category: Fixed Income

Lyxor has launched three new fixed income ETFs on Borsa Italiana, the Lyxor BofAML EUR Short Term High Yield UCITS ETF (HYS), Lyxor BofAML $ Short Term High Yield Euro Hedged UCITS ETF (HYSTH) and the Lyxor $ Float Rate Note EUR Hedged UCITS ETF (FLOTH).

Lyxor rolls out three fixed income ETFs on Borsa Italiana

Lyxor has rolled out three new fixed income ETFs on Borsa Italiana.

The first two ETFs may suit yield-hungry investors who are willing to take on the credit risk associated with high yield issuers in exchange for enhanced income potential, but are concerned about keeping duration low to protect their portfolio against the effects of rising interest rates.

HYS tracks the BofA Merrill Lynch BB-CCC 1-3 Year Euro Developed Markets High Yield Constrained Index, proving exposure to euro-denominated non-investment grade corporate bonds issued by firms domiciled in developed markets.

The index’s yield is 1.66% and its effective duration is 1.92 years. The euro-denominated fund has a total expense ratio (TER) of 0.30%.

HYSTH provides currency-hedged exposure to the performance of the short dated, US dollar-denominated sub-investment grade corporate bond market by synthetically tracking the BofA Merrill Lynch BB-CCC 1-3 Year US High Yield Constrained Euro Hedged Index.

The index has a current yield of 5.8% and an effective duration of 2.1 years. The ETF’s TER is 0.40%.

FLOTH tracks the Bloomberg Barclays US Corporate FRN 2-7 Yr Total Return Index Hedged EUR, providing currency-hedged exposure to floating rate notes with a remaining maturity between two and seven years, issued by US corporates.

Floating rate bonds offer coupons that adjust to reflect changes in interest rates, compared with traditional bonds which pay fixed coupons. This feature makes the ETF less susceptible to the negative impact of rising interest rates, as evidenced by the fund’s effective duration of just 0.13 years.

The euro-denominated ETF has a TER of 0.15%.  

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