The move is part of implementing the Stock Exchange’s strategic plan to diversify investment products for investors and encourage competition that will produce more products at attractive prices for the general public.
Bullet indices allow investors to set a yield to maturity for a bond portfolio with defined characteristics. Unlike most indices, bullet indices have a final date and when the last bond included in it is redeemed, the index ceases to exist. This is a defensive product suitable for investors looking to set a yield to maturity for a diversified bond portfolio.
The three new Boult indices are added to the Tel Bond index family, which together with the new indices currently has 48 indices and provides investors with a broad umbrella of investment options.
In the past year, and in light of the low-risk appetite that characterized the period, bond funds have become one of the most popular and recommended investment products.
Meitav Mutual Funds will be the first to launch investment products on these 3 indices, and the stock exchange believes that additional companies will launch additional products on Bollet indices. The new funds will have management fees that are among the lowest in the category.
The uniqueness of the index lies in the use of government bonds or MCAs, which serve as a substitute for the redeemable debt bond during the maturity year so that the proceeds from the final redemption of corporate bonds are invested in a filler with the same weight as the redeemed bond. For each index, a specific series is designated as a filler bond, and the weight of the filler bond in the index increases during the index’s maturity year, as the corporate bond series are redeemed so that ultimately the index will consist of filler bonds only. When the filler bond reaches maturity, the index reaches the end of its journey.
The trend of launching prominent indices in the bond index market is growing stronger, and today in this segment there are already 3 index editors calculating over 40 indices, on which products worth approximately NIS 3.2 billion have been launched.
Based on and excerpted from the press release of TASE. Selected as relevant/shortened/regrouped by VonNaftali. Pic AI-generated. Illustrative.