The Federal Reserve has published its first disclosures pertaining to the Secondary Market Corporate Credit Facility (SMCCF), which it established on 23 March as part of its attempt to ease the economic and financial consequences of the coronavirus pandemic.
VanEck Vectors Fallen Angel High Yield Bond ETF
Number of holdings - 317
Shares purchased - 410,585
Market value - $11.1m
Benchmark - ICE US Fallen Angel High Yield 10% Constrained Index
Offering exposure to USD-denominated formerly investment grade corporate bonds, this fund is comprised near entirely of BB rated credit (89%) and has seen names such as Kraft Heinz, Ford and Delta Airlines renamed ‘fallen angels'. The largest portion reach maturity in excess of 30 years (35%), while the remaining is relatively evenly spread between 1-30 years. It has a gross expense ratio of 0.45%.
Vanguard Intermediate-Term Corporate Bond ETF
Number of holdings - 1,918
Shares purchased - 2,483,885
Market value - $228m
Benchmark - Bloomberg Barclays US 5-10 Year Corporate Bond Index
Offering exposure to medium-term USD-denominated investment grade corporate bonds, this fund is comprised of mostly Baa (53%) and A rated (40%) credit, with nearly all (93%) reaching maturity in 5-10 years. It has a gross expense ratio of 0.05%.
Vanguard Short-Term Corporate Bond ETF
Number of holdings- 2,324
Shares purchased - 2,776,786
Market value - $226m
Benchmark - Bloomberg Barclays US 1-5 Year Corporate Bond Index
Offering exposure to short-term USD-denominated investment grade corporate bonds, this fund is comprised of mostly A (44%) and Baa rated (44%) credit, with the nearly all reaching maturity in 1-3 (48%) and 3-5 years (45%). It has a gross expense ratio of 0.05%.
Xtrackers USD High Yield Corporate Bond ETF
Number of holdings - 1,071
Shares purchased - 240,996
Market value - $11m
Benchmark - Solactive USD High Yield Corporate Total Market Index
Offering exposure to short to medium-term USD-denominated high yield corporate bonds, this fund is comprised of mostly BB (52%) and B rated (38%) credit, with the largest portion reaching maturity in 5-7 years (32%), closely followed by 3-5 (27%) and 7-10 years (25%). It has a gross expense ratio of 0.2%.
Benchmark, number of holdings and expense ratio data is sourced from the most recently available factsheets as 2 June. Shares purchased and market value is sourced from the Federal Reserve.