Xtrackers U.S. HY BB-B ex Financials ETF (BHYB)

Overview

The fund operates with a focus on investing in U.S. dollar-denominated, below investment-grade corporate debt, employing a passive or indexing investment strategy aimed at mirroring the performance of its underlying index, before accounting for fees and expenses. This underlying index is a specialized segment of the ICE BofA U.S. High Yield Index, crafted to reflect the performance of high yield (also known as “junk”) bonds issued within the U.S. domestic market. It's important to note that the fund takes a non-diversified approach to its investments, which means it may invest more heavily in a smaller number of issues or sectors, potentially increasing its risk and volatility.

Products and Services

• Passive or Indexing Investment Approach

  This product refers to the fund’s strategy of replicating the performance of its underlying index, aiming to achieve almost the same return as the index before fees and expenses. This approach is based on the belief that it is difficult and often more costly to attempt to beat the market through active management. The fund seeks to minimize costs and maintain portfolio stability by closely following the index.

• Investment in Below Investment Grade Corporate Debt

  The fund specifically targets U.S. dollar-denominated, below investment-grade corporate debt, commonly known as high yield or junk bonds. These securities are issued by companies that are considered to carry a greater risk of default compared to more highly rated, investment-grade bonds. The appeal of these bonds lies in their potential to offer higher yields, compensating investors for the increased risk of default.

• Concentration in the U.S. Domestic Market

  This aspect of the fund’s strategy focuses on investing solely within the U.S. domestic market. It means that all the debt instruments the fund invests in are issued by companies that are registered in the United States and are denominated in U.S. dollars. This approach can provide investors with exposure to the U.S. economy and its corporate debt market, while also avoiding the risks and complexities associated with foreign currency transactions.

• Non-Diversified Fund Status

  As a non-diversified fund, this investment vehicle does not spread its investments across as many securities or sectors as a diversified fund might. This can lead to higher volatility and risk, as the fund’s performance may be more significantly impacted by the performance of a single investment or a small number of investments. However, this strategy also offers the potential for higher returns if the fund’s specific investments perform well.