Arrow Readies High-Yield Bond ETF

Includes: GYLD
by: Tom Lydon

Arrow Investments plans to launch a new high-yield bond exchange traded fund to tap investors' thirst for income. The fund will mainly be comprised of junk bonds, and track the Global Enhanced HY Bond Issuers Index.

"Hunting for yield is a popular theme in investing these days given the paltry income environment linked to the more traditional fixed-income instruments. Arrow is thus looking for ways to capture that investor demand," said Arrow Chief Executive Officer Joseph Barrato in an IndexUniverse interview.

The fund sponsor has had success with the launch of the Arrow Dow Jones Global Yield ETF (NYSEARCA:GYLD). GYLD has gathered almost $80 million in about one year.

The proposed ETF will be made up of below-investment-grade global corporate debt denominated in either U.S. dollars, euros, Canadian dollars or British pounds, reports Cinthia Murphy for Index Universe.

Arrow also has more passive, and active, ETF strategies in line to be launched later this year. Barrato of ArrowShares also explained the firm is planning on taking some exiting mutual funds and converting them into an ETF structure.

ArrowShares currently has $560 million in assets under management.

Tisha Guerrero contributed to this article.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.