Deutsche Asset Management, begun trading a new Short Duration HY Bond ETF, the Xtrackers Short Duration High Yield Bond ETF (NyseArca: SHYL), on Wednesday, January 10, 2018. Here is a synopsis of the new ETF:
FUND INFORMATION:
| Symbol: SHYL | Exchange: NYSE ARCA |
| Name: Xtrackers Short Duration High Yield Bond ETF | Net Expense Ratio: 0.20% |
FUND OBJECTIVE:
The Xtrackers Short Duration High Yield Bond ETF seeks investment results that correspond generally to the performance, before fees and expenses, of the Solactive USD High Yield Corporates Total Market 0-5 Year Index. The Fund will normally invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in high yield (HY) bonds.
REFERENCE INDEX:
The Solactive USD High Yield Corporates Total Market 0-5 Year Index is a rules-based, market value weighted Index designed to track the performance of High Yield rated corporate bonds issued in USD with 0 – 5 years term to maturity.
The bonds eligible for inclusion in the Underlying Index must:
(i) have a composite rating calculated from available ratings among at least one of these three rating agencies: Moody’s Investors Services, Standard & Poor’s Financial Services, LLC and Fitch, Inc. as sub-investment grade;
(ii) be from issuers with at least $1 billion outstanding face value;
(iii) have at least $400 million of outstanding face value;
(iv) have an original maturity date at most 15 years; and
(v) have less than or equal to 5 years to maturity.
In addition, the Underlying Index may include a substantial number of bonds offered pursuant to Rule 144A under the Securities Act of 1933, as amended.
The Underlying Index is reconstituted and rebalanced on a monthly basis and the Fund rebalances and reconstitutes its portfolio in corresponding fashion. The Underlying Index is market capitalization weighted and the percentage weight of any issuer is capped at 3%. The Underlying Index is sponsored by Solactive AG (Index Provider), which is not affiliated with or sponsored by the Fund or the Adviser.
As of September 29, 2017 the Underlying Index was comprised of 477 bonds issued by 272 different issuers from the following countries: Australia, Belgium, Canada, the Cayman Islands, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Jersey Channel Islands, Luxembourg, Macau, the Netherlands, Norway, Singapore, Sweden, the United Kingdom and the United States.
As of September 30, 2017, a significant percentage of the Underlying Index was comprised of securities of issuers from the United States (83.2%).
TOP FUND HOLDINGS (01/11/18):
| Ally Financial Inc | 1.95 % |
| Chesapeake Energy Corp 6.625 8/15/2020 | 1.86 % |
| DELL INC | 1.84 % |
| MGM Resorts International | 1.84 % |
| Aleris Intl Inc | 1.79 % |
| Nielsen Finance LLC | 1.79 % |
| Permian Resources LLC | 1.64 % |
| ADT CORP | 1.55 % |
| Navient Corp | 1.51 % |
| Hca Healthcare Inc | 1.50 % |
TOP 5 SECTOR BREAKDOWN:
| Consumer Discretionary | 14.90% |
| Industrials | 14.04% |
| Energy | 11.72% |
| Health Care | 11.44% |
| Financials | 8.70% |
TOP 5 GEOGRAPHIC EXPOSURE:
| US | 84.22% |
| LU | 2.91% |
| IT | 1.88% |
| CA | 1.84% |
| NL | 1.82% |
Useful Links:
SHYL Home Page
Category: Bonds> Global Bonds> Global High Yield Bonds
ETFtrack comment:
Here is a comment from Fiona Bassett, Head of Passive Asset Management, Americas:
“In today’s low interest rate environment, fixed income investors are looking for new sources of yield. Our expanded Xtrackers suite of high yield bond ETFs uses rules-based strategies to provide exposure to different levels of credit and interest rate risk, allowing investors to manage credit and duration exposure for a more customized solution. SHYL will allow investors to gain cost efficient exposure specifically to the short duration high yield bonds.”