ProShares today launched the Short Term USD Emerging Markets Bond ETF (EMSH), the first short-term emerging markets bond ETF in the U.S., according to the Bethesda, Md.-based company.
The new ETF is designed to offer attractive yield potential with reduced interest rate sensitivity. The fund's expense ratio is 0.50 percent, and distributions will be made monthly.
"Investors concerned about rising interest rates have been flooding into short-term bond ETFs," said Michael Sapir, chairman and CEO of ProShare Advisors LLC, ProShares' investment advisor.
The ETF tracks the DBIQ Short Duration Emerging Market Bond Index, which is composed of a diversified portfolio of U.S. dollar-denominated emerging markets bonds with a weighted average maturity of three years or less.
The index currently includes bonds from 19 countries issued by sovereign governments, other government entities and agencies, as well as corporations that have significant government ownership.
A country’s weight in the index is capped at 10 percent. The top holdings by country are Ukraine, Brazil, Russia,Turkey and Indonesia. All five comprise at least 9 percent of the index, as of yesterday. Bonds must have a minimum $500 million outstanding issuance to be eligible, says ProShares.