Fixed income ETF provider Tabula Investment Management has launched an ETF that takes a short exposure to North American high yield corporate debt.
The Tabula North American CDX High Yield Credit Short UCITS ETF (TABS) is listed on the London Stock Exchange with a total expense ratio of 0.5%.
Being the first ETF in Europe to offer a short exposure on this type of debt, it comes at a time when the rate of year-to-date defaults in US corporate debt is at its highest since 2009.
TABS tracks the CDX North American High Yield Credit Short index which has been developed by Tabula and IHS Markit. It is comprised of roughly 100 sub-investment grade entities of equal weighting.
The current series of the index has had six defaults and therefor has 94 issuers in the series at the time of writing.
It is rebalanced on a monthly basis and TABS aims to replicate the index using CDS index positions and cash collateral.
Michael John Lyle (pictured), CEO of Tabula, commented: “Defaults have been rising, and downgrades have accelerated sharply this year and we are seeing an increase in the number of ‘fallen angels’ – companies that have their debt rating reduced to high yield status due to their deteriorating financial position – and this too could lead to further uncertainty.”
With the addition of TABS, Tabula offers six fixed income ETFs which also includes the European investment grade bond ETF the firm revealed earlier this year.
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