Van Eck Launches New Corporate Bond ETF

Van Eck, the parent company of Market Vectors, the sixth-largest U.S. ETF issuer, has introduced the Investment Grade Floating Rate ETF FLTR, a fixed income ETF designed to track the Market Vectors Investment Grade Floating Rate Index that consists of dollar-denominated floating rate notes. To be included in the index, the notes must have ratings of BBB-/Baa3 or better from one of the three top ratings agencies. Floating rate securities are different from traditional bonds in that their interest rates are reset periodically and are tied to a corresponding interest rate index. The securities were first introduced in the 1970s. Floaters can offer enhanced yields when compared to a strategy of rolling over comparably rated short-term instruments and paying the related costs associated with each transaction, according to Investinginbonds.com. The index FLTR will track is currently home to almost 200 securities. The longest third of FLTR's portfolio by maturity is scaled to represent about two thirds of total assets, with shorter maturity issues scaled to represent the remaining third, ETFdb.com reported. Market Vectors issues over 30 ETFs, including seven bond funds, with over $22 billion in assets under management.