Claymore Investments, Inc. Monday announced the launch of the Claymore Advantaged High Yield Bond ETF (TSX:CHB).

The fund has been designed to provide investors with exposure to the return and performance of a broad liquid high yield corporate bond index, the Barclays Capital U.S. High Yield Very Liquid Index, net of fees and expenses.

The index includes publicly issued United States dollar denominated, non-investment grade, fixed-rate, taxable corporate bonds that are rated high-yield (Ba1/BB+/BB+ or below) using the middle rating of Moody’s, S&P, and Fitch, respectively, have a remaining maturity of at least one year and have $600 million or more of outstanding face value.

The fund will obtain exposure to the index constituents through the use of a forward agreement with TD Global Finance, a member of TD Bank Financial Group.

Given that the high yield bonds comprising the index are priced in U.S. dollars, the fund intends to hedge the its U.S. dollar currency value back to the Canadian dollar, providing exposure to the bonds underlying the index while reducing the currency risk for Canadian investors.

“High yield bonds are a very important part of an investment portfolio for their income and diversification benefits and CHB is a simple, low cost way to obtain hedged exposure to high yield bonds on a tax-efficient basis, making it an optimal investment for income-focused investors,” says Som Seif, president and CEO of Claymore.

Claymore’s Canadian product suite includes 25 ETFs and 3 closed-end funds across broad asset classes.

IE