The iTraxx Crossover 5-Year TR Index is designed to reflect the trend of the following market: - 5-year CDS of European institutions (pure credit exposure, funded CDS position). The Fund invests in bonds whose rating is below investment grade. These are generally associated with a higher default risk and are more exposed to market fluctuations. The performance of this index is generated by three factors: current yield on CDS (carry), change in CDS prices and current yield on the financing component (EONIA rate).
As you can see in the chart, the fluctuations are very important in times of high financial stress.
The Bund yield is considered the "fly to quality" for the entire Eurozone.
