Invesco PowerShares has launched a Europe-focused short-term high yield ETF. The portfolio will be managed by Pimco.
The Pimco Euro Short-Term High Yield Corporate Bond Index Source Ucits ETF will invest in a portfolio of high-yield securities with maturities of up to five years, issued by companies in developed European markets.
Invesco said that bonds with shorter maturities should be less sensitive to changes in interest rates than those at the longer end. It believes the ETF will appeal to investors who are seeking higher income than they can get from government or investment grade corporate bonds.
Paul Syms, head of fixed income product management at Invesco PowerShares, Europe Middle East and Africa, said: “The European corporate segment looks in good shape.
“Company balance sheets are strong and on average they have plenty of cash to meet debt obligations. PIMCO’s expectation is for expected defaults to remain low relative to historical averages over the cyclical horizon.”
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