Corporate bonds

Xtrackers by DWS offers controlled risk exposure to high yield corporate bonds with HYRM

Xtracker by DWS threw an ETF offering dynamic, risk-controlled exposure to US dollar high yield corporate bonds. the Xtrackers Risk Managed USD High Yield Strategy ETF (NYSE Arca: HYRM) tracks the Adaptive Wealth Strategies Risk Managed High Yield Index, which uses a daily algorithm to dynamically adjust exposure between bonds and cash equivalents.

HYRM is designed to track the performance of the US dollar-denominated high yield corporate bond market under normal market conditions, and the performance of a US dollar cash position (accrued interest at the effective federal funds rate) for periods of adverse market conditions.

The underlying index uses a rules-based allocation mechanism to allocate either 100% exposure to the Solactive USD High Yield Corporates Total Market Index or 100% exposure to the Solactive Fed Funds Effective Index Rate Total Return, based on quantitative market risk signals derived from measuring price changes in the market.

“HYRM can be an attractive way for investors to gain exposure to the USD high yield bond market with an integrated risk management process,” said Michael Curtis, Head of US Passive Products, in the press release announcing the launch of the fund. “Downside or downside risks are a key factor when allocating to high yield bonds, which HYRM’s underlying index allocation mechanism seeks to address effectively.”

The ETF has an expense ratio of 0.30% and is designed to use investments in other Xtracker ETFs to gain exposure to US high yield bonds, particularly Xtrackers USD High Yield Corporate Bond ETF (NYSE Arca: HYLB).

DWS offers a suite of six high-yield bond ETFs with approximately $7.5 billion in assets under management that use rules-based methodologies to provide exposure to varying levels of credit risk and interest rates.

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