USB Global Asset Management has launched a new ETF providing access to the performance of US dollar-denominated short-term government bonds, quasi-government bonds and emerging market corporate bonds.
The benchmark index for the UBS ETF - JP Morgan USD EM Diversified Bond 1-5 UCITS ETF (hedged to EUR) is the JP Morgan USD EM Diversified 3% capped 1-5 Year Bond hedged to EUR Index. Only short-term bonds with a remaining term of one to five years, an outstanding volume of at least USD 500 million and a rating above B- are included in the index. In addition, the maximum market capitalisation per country in the index is limited to three per cent, thus avoiding concentration on individual countries and achieving a more even distribution of the weighting.
The ETF also has a currency hedging component to reduce the effects of exchange rate fluctuations between the reference and index currency.