Deutsche Asset Management has expanded its ‘Yield Plus’ ETF range with the listing of an ETF providing exposure to the euro-denominated corporate bond market….
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The db x-trackers iBoxx EUR Corporates Yield Plus UCITS ETF (DR)1 listed on Deutsche Börse today and comes in the wake of the asset raising success of two established db X-trackers ETFs that provide exposure to the highest yielding government bonds from investment-grade rated countries in the Eurozone – the db x-trackers iBoxx Sovereigns Eurozone Yield Plus UCITS ETF, and the db x-trackers iBoxx Sovereigns Yield Plus 1-3 UCITS ETF. The ETFs have a combined EUR 2.8 billion in assets under management2.
The db x-trackers iBoxx EUR Corporates Yield Plus UCITS ETF (DR) invests in the highest yielding investment grade euro-denominated corporate bonds. The underlying strategic beta index strategy also allows for bonds that were investment grade at time of inclusion but have since been downgraded (‘fallen angels’) to remain in the index under certain constraints. db x-trackers iBoxx EUR Corporates Yield Plus UCITS ETF (DR) is a direct replication, physical ETF.
“With interest rates remaining at historically low levels, the search for yield in the fixed income market continues. The strategic beta corporate bond index that our new ETF tracks offers a significant yield pick-up versus it’s non-yield plus equivalent, with moderately increased risk characteristics and almost identical duration,” said Martin Weithofer, Deutsche Asset Management’s Head of Strategic Beta.
The ETF’s underlying index is the Markit iBoxx EUR Corporates Yield Plus Index, which tracks approximately 800 bonds denominated in euros (the top 50% most attractive bonds in terms of corporate credit premium from a selection grouping of 1,600 investment grade bonds). The index applies a maximum aggregate weighting of 20% to those bonds which have been downgraded below investment grade.