UBS Global Asset Management has launched three ETFs offering exposure to the Barclays US Liquid Corporates 1-5 Year index on the London Stock Exchange.
The ETFs are available in a GBP-hedged version, a USD trading version and GBP trading version.
This news follows on closely from the listing of three fixed income ETFs in November offering full duration exposure, again to the Barclays US Liquid Corporates index. The index offers investors exposure to corporate bonds issued in US Dollars by financial and non-financial companies based in the USA.
The launch of the UBS ETF – Barclays US Liquid Corporates 1-5 Years UCITS ETF (hedged to GBP) adds to UBS Global Asset Management’s range of ETFs with protection against exchange rate fluctuations. For investors who would rather gain exposure to medium duration US corporate bonds without currency protection, UBS has also listed the UBS ETF Barclays US Liquid Corporates 1-5 Years UCITS ETF (USD), which is available in both USD and GBp trading currencies.
Andrew Walsh, Head of UBS ETF Sales UK & Ireland, says: “After the success we have had with our suite of currency-hedged equity ETFs, we are very happy to be expanding further in the currency-hedged fixed income space.
“Adverse foreign currency movements can have a major impact on returns when investing abroad, particularly in fixed income. It’s entirely plausible that the foreign currency in which the underlying bond is denominated could decline against your home currency to such an extent that it completely negates the returns the investor received from the bond's price return and coupon. This is a common concern for our clients, so the launch of the UBS ETF – Barclays US Liquid Corporates 1-5yr UCITS ETF (hedged to GBP) as well as our recently launched GBP-hedged ETF tracking the full duration version of this index, addresses this issue.”