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Lyxor launches inflation protected ETF


Lyxor has expanded its range of core fixed income ETFs with the launch of the Lyxor US TIPS (DR) UCITS ETF.

Listing on the London Stock Exchange, Lyxor is offering the fund in USD and GBP share classes. The firm writes that with the range, Lyxor now offers investors the choice of US, UK or European Government Bond exposures, and inflation expectations.
Investor concern over the long term prospects for inflation is driving Lyxor’s recent focus. The firm writes that the US economy is improving, the labour market is strengthening, and a rate hike may still be a factor in the long term.
“For bond investors concerned by the prospect of rising US inflation, Lyxor’s new ETF provides exposure to the performance of US Treasury Inflation Protected Securities (TIPS), which increase their coupon and nominal value in line with inflation to protect investors.”
In Europe, US TIPS ETFs have gathered over EUR1 billion in net new assets this year. Lyxor says this follows a wider trend for Government Bond ETFs, which have attracted EUR4.7 billion in new assets as investors sought safe haven assets. At 0.09 per cent, the Lyxor US TIPS (DR) UCITS ETF has the lowest Total Expense Ratio of any TIPS ETF in Europe, the firm says.
Chanchal Samadder, (pictured) Head of UK and Ireland ETF Sales at Lyxor says: “Our new TIPS ETF adds to our range of low cost, physical ETFs. With the full complement of traditional and inflation linked US and UK Government Bond exposures, we can provide investors with the tools they need to navigate this increasingly complex interest rate environment”.
Lyxor has been building up its core fixed income ETF range in recent years to reach number three in Europe for Fixed Income ETFs with over EUR 11billion in assets under management, and number two for Physical Fixed Income ETFs.

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