Market Vectors ETF Trust has launched the Market Vectors Treasury-Hedged High Yield Bond ETF (THHY) to bet long on high-yield corporate bonds and shorting Treasury notes.
THHY has a net expense ratio of 145 basis points. It is benchmarked to the Market Vectors U.S. Treasury-Hedged High Yield Bond Index, which was designed to provide exposure to below-investment grade corporate bonds, denominated in U.S. dollars, and, through the use of 5-year U.S. Treasury notes, to hedge against the price sensitivity to interest rate fluctuations of the bonds included in the Index.
“I believe it is not a question of if, but rather when, we will begin to see rising interest rates,” stated Fran Rodilosso, Fixed Income Portfolio Manager with Market Vectors.
“Predicting when rates will ascend again is obviously the hard part. With THHY, investors have the ability to better position their bond portfolios now for a rising interest rate environment, but they can do so while still earning income on the fund and even have upside potential during a low interest rate environment.”
THHY is the latest addition to Market Vectors’ innovative family of high-yield bond ETFs, including International High Yield Bond ETF (IHY), Emerging Markets High Yield Bond ETF (HYEM), and Fallen Angel High Yield Bond ETF (ANGL). The Market Vectors family totaled $27.9 billion in assets under management, of December 31, 2012.