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Invesco has rolled out its first fixed maturity bond exchange traded funds for European investors, joining firms including BlackRock, DWS and Amundi in offering similar products.
The US asset manager’s initial Ucits offering of this type consists of five strategies providing exposure to dollar-denominated investment grade corporate bonds.
The new Ireland-domiciled Invesco BulletShares ETFs are available with maturity dates ranging from 2026 to 2030. They have been listed in London, Milan and Zurich.
According to the New York-listed asset manager, the products target investors seeking to “take advantage of today’s high yields and who may be looking to tailor their portfolio’s maturity profile or their income stream”.
This article was previously published by Ignites Europe, a title owned by the FT Group.
The ETFs are available with accumulating and distributing share classes and apply annual charges of 0.1 per cent.
The products, which all track Bloomberg benchmarks, invest in securities that have at least $300mn par amount outstanding and an effective maturity within the final year of the ETFs’ fixed maturity date.
Issuers that are involved in “certain controversial business activities” or have a “severe controversy” relating to an environmental, social and governance issue are excluded from the indices.
Gary Buxton, head of ETFs and indexed strategies for Europe, the Middle East and Africa at Invesco, said: “Institutional investors often employ a strategy where they build a portfolio of bonds that produces an income stream that closely matches their liabilities.” He added that the new ETFs provide all investors with the “tools to create a similar strategy but with the added benefits of greater diversification and the transparency and trading efficiency of an ETF structure”.
“These ETFs could help pension funds match their liabilities but equally provide a simple, low-cost solution for parents needing to plan for school fees or someone saving for a house purchase,” he said.
Paul Syms, head of Emea fixed income and commodity ETF product management at the manager, said investors could use the ETFs “for longer-term financial planning through what’s known as bond laddering”.
*Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at igniteseurope.com.