ETF Securities launches two fixed income ETFs

By Penny Pryor

ETF Securities has launched the ETFS US Treasury Bond ETF and ETFS USD High Yield Bond, both currency hedged.

ETFS says the US Treasury Bond ETF is the first pure play exposure to US Treasuries available to Australian retail investors.

"Fixed income securities play an important role in investment portfolios. Their returns generally have a low correlation to equity returns, which provides portfolio diversification," ETF Securities head of product, Evan Metcalf, said.

"And over time, they have low volatility. This means they provide yield with relatively low risk. Investors often compare the yield on government bonds to the higher yield on dividends from equities. What they ignore is that to capture that dividend yield they must invest in an asset class with double-digit annual volatility."

The ETFS US Treasury Bond ETF tracks the iBoxx $ Treasuries Total Return Index, hedged into Australian dollars and the ETFS USD High Yield Bond ETF tracks the Solactive USD High Yield Corporates Total Market Index, hedged into Australia dollars.