BGI Files for High-Yield Corporate Bond ETF

Barclays Global Investors filed with the Securities and Exchange Commission (SEC) last week to offer the first exchange-traded fund (ETF) that tracks the high-yield corporate bond market.

The new ETF would trade on the American Stock Exchange, the Associated Press reported.

High-yield corporate bonds, also called junk bonds, pay higher yields than traditional bonds to compensate for greater volatility and risk of default. BGI’s new ETF would follow the iBoxx Liquid High Yield Index, which is calculated by International Index Co., according to the AP.

According to the report, in the filing, BGI said the tracking index contains “the most liquid and tradable U.S. dollar-denominated, high yield corporate bonds for sale in the United States.’

Earlier this month, BGI announced that eight new iShares fixed income ETFs began trading on the New York Stock Exchange (See Barclays Expands iShares Fixed-Income ETF Offering).

Vanguard last week announced its intention to offer four bond ETFs, based on its existing bond index funds, pending approval by the Securities and Exchange Commission (See Vanguard Edges into Bond ETF Market).