US dollars

ProShares to launch high-yield bond ETF

ProShares, a provider of leveraged and inverse exchange-traded funds, is planning a new hedged high yield bond ETF, according to a recent regulatory filing with the Securities and Exchange Commission.

A registration statement filed with the SEC on 26 November states that the the ProShares High-Yield Interest Rate Hedged ETF will track an index “designed to provide exposure to the USD-denominated high yield corporate debt market while at the same time seeking to minimise the influence on returns (both negative and positive) attributable to changing interest rates on US Treasury securities (Treasury interest rates).”

The index will attempt to meet this goal by taking long positions in high-yield corporate bonds as well as taking short positions in fixed income US Treasury securities. These short positions are designed to “mitigate any losses the high yield bonds would otherwise experience in a generally rising Treasury interest rate environment (and conversely, will limit any gains the high yield bonds would experience in a falling Treasury interest rate environment).”

ProShares has yet to announce the expense ratio or the ticker symbol for the new ETF.

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