The Amplify Samsung SOFR ETF , which debuted Wednesday, is the first ETF to track SOFR, the overnight interbank lending rate that has emerged as the U.S. replacement for the now-defunct Libor gauge of overnight borrowing interest costs.
The new fund's launch comes amidst a wave of enthusiasm for ultra-short term fixed income ETFs, as yields on products throughout the fixed income spectrum have risen to multi-year highs following an aggressive rate hiking cycle by the Federal Reserve.
"It wasn't until this year that rate-driven products became priorities," said Bill Belden, president of Amplify.
Flows into money market and ultra-short term products account for about 36% of all inflows into fixed income ETFs this year, though the category represents only 15% of all fixed income ETF assets, according to Matthew Bartolini, head of product research at State Street Global's SPDR Americas ETF division.
Belden said that a large institutional investor has provided seed capital of $50 million for the new ETF.
Persons:
Yves Herman, Bill Belden, Matthew Bartolini, SOFR, Belden, Suzanne McGee, Ira Iosebashvili, Cynthia Osterman
Organizations:
Samsung, REUTERS, ETF, Federal Reserve, Thomson
Locations:
Brussels, Diegem, Belgium, U.S, Americas