Daily ETF Watch: DB Preps Bond Funds

February 28, 2014

An ultra-short bond fund and a muni-bond offering from DB are in the works.

Deutsche Bank has filed regulatory paperwork for two proposed bond funds: a short-dated bond fund and a municipal bond fund. In the first instance, the short-dated fund would take risk of rising interest rates off the table, while the muni fund would serve up steady yields in a gyrating market environment.

The db X-trackers Ultra-Short Duration Bond Fund (LQID) will invest in debt securities of U.S. and foreign government agencies, corporate securities, mortgage-backed and asset-backed securities, taxable municipal and tax-exempt municipal bonds, adjustable rate loans that have a senior right to payment, and other floating-rate debt securities, according to a regulatory filing.

It has an annual expense ratio of 0.25 percent, or $25 for every $10,000 invested

The db X-trackers Managed Municipal Bond Fund (AMUN) will invest in securities issued by municipalities across the United States (including the Commonwealth of Puerto Rico and U.S. territories such as the U.S. Virgin Islands and Guam) whose income is free from regular federal income tax.

The fund has an expense ratio of 0.40 percent, or $40 for every $10,000 invested.

Investors have begun in recent months to shift bond holdings to the short end of the yield curve to manage interest-rate risk as the Federal Reserve continues to taper its economic stimulus package.

Also, year-to-date, the S&P 500 Index is up 0.32 percent as investors keep a watchful eye on the slowing Chinese economy and mixed economic data in the U.S. for signs of an overall slowdown in global markets.

Filings

  • ETFis Capital has filed regulatory paperwork for an active master limited partnership fund dubbed the InfraCap Active MLP ETF (AMZA) that will invest in publicly traded MLPs and limited liability companies taxed as partnerships.

AMZA will typically invest in a portfolio of between 25 to 50 MLPs and may use short positions in other ETFs, options or futures contracts to hedge against market, interest-rate or commodity risks in the Fund’s portfolio. Its annual expense ratio is 1.00 percent, or $100 for every $10,000 invested.

  • Global X has filed regulatory paperwork for its Global X China Bond ETF to track the China Onshore Bond Index, which comprises Chinese renminbi-denominated bonds issued by governments, agencies, supranationals and corporations.

The firm will look to partner with a local subadvisor that qualifies for renminbi qualified foreign institutional investors quota to directly access mainland China bonds. Associated fees and tickers for the fund were not made available in the filing.

 

 

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