UBS Asset Management has listed a new exchange traded fund on London Stock Exchange: the UBS ETF (LU) Barclays USD Emerging Markets Sovereign UCITS ETF which offers investors access to sovereign and quasi-sovereign bonds from more than 60 emerging markets countries.
The index currently comprises more than 100 securities. This UBS ETF allows investors easy access to these bonds in a cost-efficient wrapper.
Index constituents are denominated in US dollars as opposed to the respective local currencies. Country restrictions are used in order to guarantee a representative investment in sovereign emerging markets at global level: investments in a single emerging market country may not exceed 3% of the index. Furthermore, illiquid market segments are removed at the index level via a stringent liquidity filter. This provides investors with transparent and flexible access to emerging markets government bonds.
Andrew Walsh, Head of UBS ETF Sales for UK & Ireland, says: "The addition of the UBS Barclays USD Emerging Markets Sovereign UCITS ETF continues our expansion in the fixed income space and offers our clients a simple way to access USD-denominated government debt issued by emerging economies with competitive pricing. The underlying index the ETF tracks provides a more balanced set of country weightings than an un-capped index of this sort. For example, countries such as Turkey, Indonesia, Russia and Mexico would normally have weights in the high single-digits, but our ETF will only have a 3% maximum exposure to such countries' debt issuance. Conversely, smaller EM sovereign issuers such as Chile, Uruguay and Sri Lanka will have higher relative weights than they would have in an uncapped index."