WisdomTree And iShares File For Corporate Bond ETFs

by on November 2, 2012

Stocks are on their way to settle into green territory for the week despite enduring a much unexpected start. Much to everyone’s surprise, trading on Wall Street has been fairly tame despite the closure of the New York Stock Exchange on Monday and Tuesday as a result of Hurricane Sandy. Despite lackluster developments for countless communities on the east coast this week, economic data releases have been quite positive; consumer spending and ISM data have both come in above expectations, while weekly jobless claims also painted an encouraging outlook for the domestic labor market [see also ETFdb Analyst Picks: Surviving The Storm].

On the product development front, State Street rolled out a pair of factor-based ETFs, one focusing on value stocks and the other on momentum. WisdomTree and iShares on the other hand stuffed the pipeline with an intriguing corporate bond fund filing each.

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  • WisdomTree Global Corporate Bond Fund: This actively-managed ETF will seek a high level of total return consisting of both income and capital appreciation. The SEC filing states that this fund will be comprised of junk and investment grade debt notes from issuers spanning across both developed and emerging markets. This ETF will employ a “top down” analysis of macroeconomic factors and a “bottom up” analysis of countries and issuers to select its underlying holdings [see 8% Yield ETFdb Portfolio].
  • iShares Corporate Bond Fund: This ETF will be comprised of U.S. dollar-denominated, investment-grade debt securities issued by domestic and non-U.S. entities. According to the SEC filing, this proposed fund will separate itself from similar minded corporate bond ETFs by entirely sidestepping the financials sector. This fund will exclude exposure to debt notes from financial issuers, thereby increasing its appeal to risk-averse investors [see Financials-Free ETFdb Portfolio].

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Disclosure: No positions at time of writing.