WYDEProShares CDS Short North American HY Credit ETF
WYDE Fund Description
WYDE, an actively managed fund, primarily invests in credit default swap (CDS) indexes to express bearish views on overall credit quality of the high-yield market in North America.
WYDE Factset Analytics Insight
WYDE offers one-of-a-kind inverse credit exposure to the North America high-yield market through index-based credit default swaps—CDX indexes. A CDX index behaves somewhat like a bond, in that the index declines when its referenced CDS spreads rise. When credit conditions worsen, CDS spreads widen and CDX indexes decline. As such, the fund shorts credits by longing CDSs via short positions on CDX indexes. Also like a bond, short positions in CDX must make periodic coupon payments to long positions. The coupon payments (short interest) are deducted from the fund’s NAV. As such, WYDE will steadily decline in value if credit conditions remain stable or even deteriorate slightly.WYDE is reasonably priced, but trading costs are more relevant for this short-term tactical tool. Unfortunately, weak investor interest has translated to a thin order book and wide spreads. In addition, closure risk is a major concern—the fund’s long-CDX twin, TYTE, was liquidated in 2016 due to lack of interest.
WYDE CHARTS AND PERFORMANCE
WYDE Factset Analytics Block Liquidity
This measurement shows how easy it is to trade a $1 million USD block of WYDE. WYDE is rated a 5 out of 5.