Deutsche Asset & Wealth Management announced the further expansion of the db X-trackers suite of exchange-traded funds (ETFs) with the launch of the db X-trackers Solactive Investment Grade Subordinated Debt Fund (NYSE Ticker: SUBD)…..
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The first-of-its kind U.S. listed ETF tracking a subordinated debt index offers investors uncomplicated access to investment-grade subordinated bonds, which have the potential to produce higher yields than equivalent unsubordinated bonds and may provide attractive returns to investors capable of taking on additional risk.
“Our goal for the db X-trackers suite of products has always been to offer investors the means to easily gain exposure to various investment opportunities,” said Fiona Bassett, Deutsche Asset & Wealth Management Americas Head of Passive Asset Management. “With the addition of SUBD to our platform, we continue to bolster our fixed income offerings, growing the number of investment options available.”
SUBD tracks the Solactive Subordinated Bond Index, a rules-based, market value-weighted index designed to track the investment-grade, subordinated corporate bond market of U.S. dollar-denominated corporate securities classified as subordinated or junior subordinated. As of April 30, 2014, the Index is comprised of 137 constituents representing approximately 70 parent companies with $169 billion in total amount outstanding.
By tracking the subordinated, investment grade debt mirrored by the Solactive Subordinated Bond Index, SUBD is designed to provide higher yields via bonds of investment-grade companies. The higher yields are produced by the subordinated nature of the bonds rather than by using junk bonds. The fund will be subject to marginally higher credit risk due to its investments in subordinated debt.
Astrid Ludwig, Head of the Bond & Complex Team, Solactive, said, “We are excited to support Deutsche Asset & Wealth Management as they launch another innovative fund tracking a Solactive branded index. In a context of historically low interest rates, the Solactive Subordinated Bond Index is tracking a market which offers an interesting compromise between yield and risk.”
Deutsche Asset & Wealth Management’s U.S. exchange traded products (ETP) platform includes 64 ETPs, with approximately $11 billion in assets under management. Deutsche Asset & Wealth Management’s ETP platform was launched in 2006 and has risen to become the second largest ETP provider in Europe and the fifth largest in the world, with approximately $63 billion in assets under management as of December 31, 2013.
Source: ETFWorld
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