The rapidity of U.S. tariff announcements and almost immediate delays this week resulted in a spike of market volatility. Those advisors and investors concerned about trade wars, inflation, interest rates, and more this year would do well to consider the +KraneShares Sustainable Ultra Short Duration Index ETF+ (KCSH ). The strategy seeks income through ultra-short corporate bond exposures that carry reduced interest rate and default risk.
The rapidity of U.S. tariff announcements and almost immediate delays this week resulted in a spike of market volatility. Those advisors and investors concerned about trade wars, inflation, interest rates, and more this year would do well to consider the KraneShares Sustainable Ultra Short Duration Index ETF (KCSH). The strategy seeks income through ultra-short corporate bond exposures that carry reduced interest rate and default risk.
Seek Income While Diversifying Your Bond Portfolio
The KraneShares Sustainable Ultra Short Duration Index ETF (KCSH ) seeks to track the Solactive ISS Sustainable Select 0-1 Year USD Corporate IG Index. The index measures the performance of investment-grade corporate bonds with maturities up to one year. The fund generated a 30-day SEC yield of 4.36% as of February 3, 2025 and offers better returns than the Agg since inception.
Investment-grade bonds offer a historically lower risk of default compared to noninvestment-grade bonds. IG bonds also offer the potential for reliable yields for investors. The bonds KCSH invests in are U.S. dollar-denominated, and the strategy seeks to offer similar credit and interest rate risk as ultra-short duration IG bond benchmarks.
While offering valuable diversification within bonds, the fund’s strategy also provides an enhanced level of diversification through its focus on those companies aligned with the Paris Agreement. Companies whose bonds are included must work to curtail global emissions to 1.5 degrees Celsius by 2050.
Issuers included in the Index must demonstrate self-decarbonization of 7% or greater each year before their inclusion in the portfolio. The strategy also excludes issuers that derive revenues from fossil fuels and other sources. The added screen creates a diversified portfolio within ultra-short bonds.
KCSH makes a strong complement to existing ultra-short bond exposures and a general diversifier for fixed income portfolios. The fund carries an expense ratio of 0.20% with fee waivers that expire August 1, 2025.
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