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Solactive expands family of USD High Yield Corporates Indices used as the basis for three new Xtrackers ETFs

Solactive is adding three new indices to its family of high yield corporate bond indices, which have been developed as the basis for three new Xtrackers ETFs issued this week and trading on the NYSE.

The three indices are the Solactive USD High Yield Corporates Total Market 0-5 Year Index (SOLHYCST), the Solactive USD High Yield Corporates Total Market Low Beta Index (SOLHYCLB), and the Solactive USD High Yield Corporates Total Market High Beta Index (SOLHYCHB). Each index aims to offer exposure to different segments of the high yield corporate bond market denominated in USD.

The first index, SOLHYCST, tracks the performance of short duration high yield bonds with term to maturity of maximum 5 years. Instead, SOLHYCHB mirrors the performance of lower credit quality higher-beta bonds, while SOLHYCLB of lower-beta bonds, with beta representing a bond’s level of volatility, and higher/lower beta generally corresponding to higher/lower yield.

The indices are respectively tracked by three ETFs, namely Xtrackers Short Duration High Yield Corporate Bond ETF (NYSE Arca: SHYL), Xtrackers High Beta High Yield Bond ETF (NYSE Arca: HYUP), and Xtrackers Low Beta High Yield Bond ETF (NYSE Arca: HYDW).

Steffen Scheuble, CEO of Solactive, commented: “It is well known that high yield corporate bonds are an attractive alternative for higher returns within the fixed income market. By expanding the Solactive USD High Yield Corporates Index range, we explore alternative strategies that will allow market participants to easily customize their risk exposure within this segment to an extend that is unique in the market.”

The indices are weighted by market capitalization with a 3% cap per issuer and are readjusted monthly. All index components must have a composite rating that is sub investment grade and must be corporate debt denominated in USD from developed markets. The indices are calculated as total return versions, meaning that the coupon payments are reinvested in the index on each adjustment day.

Next Finance 18 January
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