ProShares launched a high-yield corporate debt exchange-traded fund that will take a short position in      U.S. Treasurys, offsetting exposure to junk bonds. The ProShares High Yield-Interest Rate Hedged ETF is the third of its kind, and the least expensive, with an annual expense ratio of 0.50%.  

The fund will trade under the symbol HYHG and track the performance of the Citi High Yield Index.

The Citi High Yield Index takes long positions in high-yield bonds and short positions in U.S. Treasurys. By taking short positions in U.S. Treasurys, the fund aims to ease the potential negative impact of rising interest rates.

"We believe that many investors in high-yield bond funds may be focused on credit risk but overlook the risk presented by rising rates. When rates go up, they could be in for an unpleasant surprise," said Michael Sapir, Chairman and CEO of ProShare Advisors.

HYHG is the third yield-seeking junk bond ETF, competing with funds from Van Eck Global, the money manager behind the Market Vectors ETFs, and First Trust.  

The Market Vectors Treasury-Hedged High Yield Bond ETF (THHY) launched on March 22 and seeks to replicate the price and yield performance of the Market Vectors U.S. Treasury-Hedged High Yield Bond Index (MVTHHY). The fund has a net expense ratio of 1.45%.

First Trust High Yield Long/Short ETF (HYLS) was launched in February and holds U.S. and non-U.S. corporate debt, convertible bonds, loans and Treasurys. The fund’s expense ratio is 0.95%.