Tuesday, November 12, 2013

PowerShares Global Short Term High Yield Bond Portfolio

One ETF to consider is the PowerShares Global Short Term High Yield Bond Portfolio (NYSEARCA:PGHY). The ETF is based on the DB Global Short Maturity High Yield Bond Index. The Index will generally invest at least 80% of its total assets in US and foreign short-term, non-investment grade bonds included in the Index, all of which are denominated in US dollars. The ETF does not include all of the securities that are listed in the Index, but uses a sampling method in seeking to achieve its investment objective. The ETF, as well as the Index, rebalances quarterly and reweights annually.
As of November 1, 2013, the 30-day SEC yield is 3.61%. This yield is based on its payments over the last 30 days. The distribution yield is 4.78%. This yield is based on interest return plus any other distribution. The effective duration of PGHY is 1.39 years. Duration is the number of years that is required for an investor to receive the value of all future payments, both interest and principal, from a bond. The length of time it takes to receive payments will reflect in a bond's sensitivity to bond prices, because the shorter the duration is, the less sensitive the bond will be to changes in interest rates.