Daily ETF Watch: Currency Hedged Bond Fund

May 08, 2015

Usually, with ETFs, currency hedging refers to funds that invest in foreign equities, while interest-rate hedging refers to fixed-income funds. In its latest filing, iShares is looking to apply currency hedging to high-yield corporate bonds.

 

The iShares Currency Hedged Global ex USD High Yield Bond ETF will track only bonds denominated in euros, British pounds sterling or Canadian dollars by issuers in developed markets, according to the prospectus. The Markit iBoxx Global Developed Markets ex-US High Yield (USD Hedged) Index includes bonds maturing in one to 15 years, and it caps individual issuers at 3 percent.

 

As is iShares’ practice with its currency-hedged products, the fund will primarily invest in another of the firm’s ETFs, the iShares Global ex USD High Yield Corporate Bond ETF (HYXU | C), and apply the currency hedge to that portfolio. HYXU has an expense ratio of 0.40 percent, or $40 per $10,000 of investment assets, and has more than $250 million in assets under management.

 

iShares’ filing for the currency-hedged bond fund ETF did not include an expense ratio or ticker, nor did it indicate where the fund would list.

 

RevenueShares For Sale

A recent Reuters article noted that VTL Associates LLC, which owns RevenueShares, is looking to unload the ETF provider. VTL has hired the Royal Bank of Canada to help it find a buyer.

 

RevenueShares has eight ETFs currently trading, with a total of $1 billion in assets. The largest fund in the family is the RevenueShares Small Cap ETF (RWJ | B-81), which has nearly $365 million in assets under management.

 

VTL did not indicate how much it was asking for the ETF provider or which firms had expressed interest; however, it did note that no deals were currently in the works.

 

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