Amplify Changes Yield ETF To A Senior Loan Fund

Less than a year after launching the Amplify YieldShares Prime 5 Dividend ETF PFV, Amplify ETFs revealed significant changes to that exchange-traded fund. That fund is now known as the Amplify YieldShares Senior Loan and Income ETFYESR.

YESR follows the Prime Senior Loan and Income CEF Index, which “is designed to provide targeted exposure to closed-end funds (CEFs) that invest at least 80% of their assets in floating rate senior loans and other floating rate instruments, pay dividends and are listed in the United States. The New Index will be developed, maintained and sponsored by Prime Indexes, which is not affiliated with the Fund, the adviser or sub-adviser,” according to a statement from Chicago-based Amplify.

Floating rate notes and senior loans are unique in that their yield is tied to a benchmark such as LIBOR, rather than being fixed. Loans are also higher on the capital structure than other unsecured obligations, and some even carry floors to insure you earn a respectable yield even if rates stay low. Their coupon rate typically resets every 90 days, resulting in a duration shorter than three months, Benzinga reported.

YESR's Objective

In its new form, YESR will evaluate floating rate closed-end funds based on distribution rate, premium/discount rate, total expense ratios and liquidity. As an asset class, senior loans are often favored during rising interest rate environments because the floating rate component makes them less sensitive to higher borrowing costs.

The ETF's top 10 holdings combine for over 55 percent of its weight. With a total expense ratio of 2.15 percent per year, or $21.50 on a $10,000 investment, YESR is pricier than the old PFV. PFV charged just 0.45 percent per year. Still, YESR's fee is comparable to those found on other ETFs that hold closed-end funds.

More On Amplify

Other Amplify ETFs include the fast-growing Amplify Online Retail ETF IBUY, one of this year's best-performing retail ETFs; and the YieldShares High Income ETF YYY. Souring On Semiconductor ETFs Gold ETFs Could Shine In September

“Amplify ETFs, sponsored by Amplify Investments, has over $295 million in assets across ETFs for which it is Adviser or Sub-Adviser (as of August 22, 2017),” according to the statement.

Related Links:

Posted In: AmplifyAmplify ETFsBATSSenior Loan fundsSLFsYESRyieldyield ETFsLong IdeasNewsBondsSpecialty ETFsNew ETFsMarketsTrading IdeasETFs

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.