Deutsche AM’s db X-trackers ETF platform has launched what it claims to be the world’s first exchange traded fund offering exposure to the Asia ex-Japan dollar corporate bond market.
The db X-trackers II iBoxx USD Liquid Asia Ex-Japan Corporate Bond Ucits ETF (DR) is listing on both Deutsche Boerse and the London Stock Exchange.
Tracking an index of some 148 investment grade corporate bonds from nine countries, it applies a direct physical replication strategy.
The Asian dollar denominated investment grade corporate bond market saw issuance increased to $63bn in 2015, up from $21bn in 2010. The underlying index used focuses on bonds with over $750bn outstanding. Currently the index yields 3.1%, on average duratino of 5.03 years, and an average credit quality of A-.
As of 31 August, Chinese corporate bonds represented the highest weighting in the index, just more than 50%. Corporate bonds from Hong Kong and India both have weightings of more than 10%. Other countries represented in the index are Malaysia, Indonesia, Singapore, Thailand and South Korea.