Deutsche Bank has come out with three new bond ETFs that look to capitalize on the increasingly popular ETF bond market. The Deutsche X-trackers Investment Grade Bond - Interest Rate Hedged ETF IGIH, the Deutsche X-trackers High Yield Corporate Bond - Interest Rate Hedged ETF HYIH and the Deutsche X-trackers Emerging Markets Bond – Interest Rate Hedged ETF EMIH all began trading on March 3.
The three ETFs provide exposure to the fixed-income market; however, the major difference is that they implement a hedging strategy through the shorting of U.S. Treasury futures in order to mitigate interest-rate risk. The risk that bond prices may fall with rising rates is a concern for most investors. The three new Deutsche Bank ETFs attempt to decrease that sensitivity through hedging and provide similar results after the Federal Reserve starts to hike interest rates.
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IGIH seeks income through exposure to investment-grade corporate bonds across eight countries, with the Unites States at 75 percent and the United Kingdom at 9 percent making up the majority of the portfolio. The ETF is made up of 85 positions, including issues from:- Bank of America Corp BAC
- Wal-Mart Stores, Inc. WMT
- Goldman Sachs Group Inc GS
Deutsche X-trackers High Yield Corporate Bond - Interest Rate Hedged ETF
HYIH provide exposure to the high-yield bond market while minimizing interest rate risk. HYIH is made up of 67 total securities across four countries, with the United States making up the majority of the allocation at 93 percent. The ETF has issues from companies such as:- T-Mobile US Inc TMUS
- Best Buy Co Inc BBY
- Valeant Pharmaceuticals Intl Inc VRX
Deutsche X-trackers Emerging Markets Bond – Interest Rate Hedged ETF
EMIH provides exposure to 50 emerging-market debt issues across 29 countries, while decreasing the interest rate risk with hedging. The top weighted countries are:- Poland at 12 percent
- Peru at 12 percent
- Hungary coming in at 11 percent
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