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James Williams, Hedgeweek

UBS launches three corporate bond ETFs… Kames Capital adds two more UCITS funds to its absolute return fund range…

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ML Capital Asset Management Ltd is to act as Investment Manager and Promoter of the Catalyst Global Real Estate Fund, an Irish domiciled UCITS. Established in South Africa in 2001, Catalyst Fund Managers, now manages in excess of USD1bln in specialist listed real estate portfolios. The investment team led by Andre Stadler and Jamie Boyes have collectively over 65 years’ experience in the sector with institutions such as Investec and Old Mutual.

ML Capital was engaged by Catalyst Fund Managers to lead the re-domiciliation on what was a Guernsey-domiciled PCC following strong investor demands for a UCITS offering. The fund was initially launched in September 2008, and “ranks 1st in its peer group since inception” by Morningstar.
 
The USD290mn Catalyst Global Real Estate UCITS Fund will invest at least 75 per cent of its NAV in global listed equities of issuers operating in the real estate sector. It will be a medium volatility portfolio, benchmarked against the UBS Global Real Estate Investors Index, with a medium to long term investment horizon.
 
Speaking on the new partnership, Jamie Boyes of Catalyst commented: “The benefits that UCITS delivers are being better understood by investors and there are very exciting times ahead for the fund.”
 
Cyril Delamare, CEO and co-founder of ML Capital stated: “We are delighted that Catalyst have chosen to partner with us for their fund’s relocation to Ireland and conversion to UCITS. The fund’s real estate focus enhances and diversifies the ML Capital offering, and the Catalyst reputation and track record speaks for itself. This is already a top performer in both the short and long term, with a stable return pattern proving to be a strong product with investors, and we expect growth to continue.”
 
Kames Capital, which operates out of both Edinburgh and London, has launched two absolute return funds to complement its existing range. The launch of the Kames Equity Market Neutral Fund and the Kames Equity Market Neutral Plus Fund means the firm now has four absolute return funds in its investment range.
 
The two funds will leverage Kames existing expertise in the absolute return space, by providing investors with a wider choice of strategies to complement the existing Kames UK Equity Absolute Return Fund.
 
The Kames Equity Market Neutral Fund will target a return of cash plus 4 per cent, in all market conditions, over a 36-month rolling term. David Griffiths and David Pringle, who currently run the Kames UK Equity Absolute Return Fund, will manage the fund alongside Malcolm McPartlin. The portfolio will typically hold 50 to 100 equity asset positions.
 
The Kames Equity Market Neutral Plus Fund will aim to generate a return of cash plus 8 per cent, again in all market conditions, over a 36-month rolling term.
 
The Kames UK Equity Absolute Return Fund has returned 21.04 per cent since launch in February 2010.
 
Kames Capital’s chief investment officer Stephen Jones commented: “These latest two absolute return funds are intended to build on the success of our existing absolute return strategies which are enjoying considerable success. Our genuine market neutral returns are appreciated by investors in both the UK and Europe, and they are now asking for us to replicate these strategies but with the potential for greater returns on their capital. We believe these two funds meet this demand whilst remaining true to our absolute philosophy of providing real market neutral returns.”
 
UBS Global Asset Management this week announced the listing of 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.
 
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.
 
Commenting on the latest listings, Andrew Walsh, Head of UBS ETF Sales UK & Ireland, said: “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.”
 
He continued: “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.

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