Amundi has launched the Aumndi ETF Floating Rate Euro Corporate 1-3 UCITS ETF the Euronext Paris. The ETF has also been registered with Financial Conduct Authority (FCA).
Further cross registrations and listings are foreseen in the weeks to come in other European countries.
The ETF provides exposure to Floating Rate Notes by tracking the performance of the Markit iBoxx EUR FRN IG 1-3 index2 (total return), ie coupons re-invested, as calculated and published by index provider Markit Indices Limited, as closely as possible, whether it is rising or falling. Bonds in the index are drawn from a universe of investment grade euro-denominated floating rate bonds issued by corporates, with a maturity of 1 to 3 years.
With interest rates at historic lows, this innovative product offers a solution for insulating portfolios from interest rate moves. With a coupon that changes in line with interest rates, Floating Rate Notes have a low degree of price sensitivity and a yield which is less negatively impacted by a rise in rates than fixed-rate bonds.
The ETF is offered with a TER3 of only 0.18%.
Valérie Baudson, Global Head of ETF and Indexing at Amundi, says: “We are delighted to offer investors a unique exposure in Europe to the Floating Rate Notes universe. This new ETF offers a new allocation brick for European bonds and once again demonstrates our commitment to innovation, which is at the core of our competitively-priced product development.”