The three indices are the Solactive USD High Yield Corporates
Total Market 0-5 Year Index (SOLHYCST), the Solactive USD High Yield Corporates Total
Market Low Beta Index (SOLHYCLB), and the Solactive USD High Yield Corporates Total
Market High Beta Index (SOLHYCHB). Each index aims to offer exposure to different
segments of the high yield corporate bond market denominated in USD.
The first index, SOLHYCST, tracks the performance of short duration high yield bonds with
term to maturity of maximum 5 years. Instead, SOLHYCHB mirrors the performance of
lower credit quality higher-beta bonds, while SOLHYCLB of lower-beta bonds, with beta
representing a bond’s level of volatility, and higher/lower beta generally corresponding
to higher/lower yield.
The indices are respectively tracked by three ETFs, namely
Xtrackers Short Duration High Yield Corporate Bond ETF (NYSE Arca: SHYL), Xtrackers
High Beta High Yield Bond ETF (NYSE Arca: HYUP), and Xtrackers Low Beta High Yield
Bond ETF (NYSE Arca: HYDW).
Steffen Scheuble, CEO of Solactive, commented: “It is well known that high yield
corporate bonds are an attractive alternative for higher returns within the fixed income
market. By expanding the Solactive USD High Yield Corporates Index range, we explore
alternative strategies that will allow market participants to easily customize their risk
exposure within this segment to an extend that is unique in the market.”
The indices are weighted by market capitalization with a 3% cap per issuer and are
readjusted monthly. All index components must have a composite rating that is sub
investment grade and must be corporate debt denominated in USD from developed
markets. The indices are calculated as total return versions, meaning that the coupon
payments are reinvested in the index on each adjustment day.
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