Lyxor Asset Management has launched a floating rate note ETF to help investors to deal with rising interest rates in the US, the company has announced.
The Lyxor $ Floating Rate Note Ucits ETF offers investors exposure to US corporate bonds which increase their coupon as the three month Libor rate rises.
The French asset manager said this allows investors to access the US corporate bond market, while still protecting their yield.
To aid liquidity, the index tracked by the new ETF only holds investment grade bonds with at least two years to maturity and $500 million outstanding.
Emerging market bonds, or bonds issues more than two years ago are excluded from the investment universe.
According to Lyxor, floating rate bond ETFs have seen inflows of nearly €2 billion as investors get ready for interest rate hikes from the US Federal Reserve.
The asset manager added it will also launch a euro-hedged version for those concerned about the euro/US dollar exchange rate.