An ETF to protect themselves against rising interest rates
Demand for products that generate high returns and that provide protection against a possible rise in interest rates continues to grow. To meet these needs, the firm Invesco Canada has launched the exchange traded fund (ETF) PowerShares Senior Loan (USD Hedged) Index.
This ETF is trading at the Toronto Stock Exchange under the symbol BKL.
It offers access to an asset class that has historically generated higher returns than other fixed income effects whose credit rating is equivalent or higher. “This category also provides an additional measure of security against repayment defaults. In addition, the low duration of senior loans may reduce the overall sensitivity of the portfolio against interest rate, “said Invesco.
The company says it would be a first in the country.
With this new ETF, Invesco makes available to investors an asset class “whose negotiation was previously reserved exclusively for institutional investors.” The senior loans are a tool to diversify portfolios of fixed income investors due to their low correlation with other segments of fixed income investments.
This new ETF seeks to replicate (before fees) the performance of the S & P / LSTA (Loan Syndications and Trading Association) Leveraged Loan U.S. 100 (USD Hedged). The Index exposes investors to the 100 loan facilities most important to a larger index, the S & P / LSTA Leveraged Loan.