ETF Watch: Nuveen Plans Short Term Bond Fund

Proposed actively managed fixed-income ETF will target bonds with remaining maturities of five years or less.
Reviewed by: Staff
Edited by: Staff

Nuveen has filed for a fixed-income ETF that will target U.S. issues with remaining maturities of less than five years. The NuShares Enhanced Yield 1-5 Year U.S. Aggregate Bond ETF will track an index that reweights the components of a parent benchmark according to their likelihood of achieving higher yields than that of the parent benchmark.

The underlying index takes into account asset class, sector, credit quality and maturity when establishing component weights. According to the prospectus, the index looks to maintain a similar risk and credit quality profile as the parent benchmark by maintaining similar sector, tracking error, duration and turnover.

The fund has a very broad focus: Components can be drawn from the corporate, mortgage-backed securities and U.S. government segments as well as foreign debt issued in U.S. dollars, the prospectus said.

There are other funds covering short-term U.S. debt, but they are all actively managed. The largest is the $5.6 billion PIMCO Enhanced Short Maturity Active ETF (MINT), but it targets the “ultra-short” maturity space and has an effective maturity of less than six months.

The filing did not include an expense ratio, ticker or listing exchange.

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