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Market Vectors introduces US Treasury-Hedged High Yield Bond index
By Toni Weeks
San Luis Obispo, Calif., Feb. 5 - Market Vectors Index Solutions GmbH said it has introduced the Market Vectors US Treasury-Hedged High Yield Bond index.
The new index expands the company's current bond index exposure, which, prior to the new index, consisted of the Market Vectors Renminbi Bond index and the Market Vectors US Investment Grade Floating Rate Index.
The new index tracks the performance of long positions in dollar-denominated, below-investment-grade bonds and an equivalent dollar amount of short positions in U.S. Treasury notes. Only securities with a minimum of 12 months remaining to maturity, a fixed coupon schedule and a minimum amount outstanding of $500 million dollars are included in the index.
In addition, the issuer of the bond must be incorporated in the United States.
"After years and years of declining U.S. interest rates, many investors have begun to contemplate what to do when the tide turns and interest rates rise, " chief executive officer Lars Hamich said in a press release.
"We therefore believe that the Market Vectors US Treasury-Hedged High Yield Bond index benchmarks a segment of particular interest to investors. The combination of long and short components results in an index that tracks the marriage of these two investment goals: participation in high yield and interest rate protection."
The index is calculated as a total return index and is rebalanced monthly.
Market Vectors, a wholly owned subsidiary of New York-based Van Eck Associates Corp., develops, monitors and licenses the Market Vectors indexes, which are designed to underlie financial products.
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