Invesco PowerShares has launched three ETFs to meet strong demand among European investors for low cost fixed income vehicles.
The PowerShares USD Corporate Bond UCITS ETF, PowerShares Euro Corporate Bond UCITS ETF and PowerShares Emerging Markets USD Bond UCITS ETF build on PowerShares’ established European suite of nine active and passively managed fixed income ETFs co-managed by PIMCO as well as the PowerShares US High Yield Fallen Angels UCITS ETF.
The PowerShares USD Corporate Bond UCITS ETF tracks the Bloomberg Barclays USD Investment Grade Corporate Liquidity-Screened Bond Index and offers one of the lowest annual fees in the market at 0.16 per cent. The average rating of underlying assets is A-, with industrials accounting for around 60 per cent of sector allocation, and a yield to maturity of 3.11 per cent.
The PowerShares Euro Corporate Bond UCITS ETF tracks the Bloomberg Barclays Euro Corporate Index and also comes with a very low annual fee of just 0.16 per cent. The average rating of underlying assets is A-, with industrials accounting for just over half of the sector allocation, and a yield to maturity of 0.61 per cent.
The PowerShares Emerging Markets USD Bond UCITS ETF tracks the Bloomberg Barclays Emerging Markets USD Sovereign Bond Index and, in the emerging market sector, offers one of the lowest annual fees at 0.35 per cent. The average rating of underlying assets is BB+, with a yield to maturity of 4.87 per cent. The top five country holdings are Argentina, Indonesia, Turkey, Mexico and Saudi Arabia.
Invesco PowerShares has USD29.8 billion in fixed income assets under management (AUM), and the firm’s European fixed income ETFs are managed by a team of six, led by Jeff Kernagis.
On 16th October this year, the firm expanded its range of short-term high yield ETFs with the launch of the PIMCO Euro Short-Term High Yield Corporate Bond Index Source UCITS ETF, a Europe-focused version of its existing USD product which has USD1.2 billion in AUM.
Paul Syms, Head of Fixed Income Product Management at Invesco PowerShares, says: “While the many benefits of ETFs are well known to equity investors, the focus continues to shift towards the fixed income space. There is clear and strong demand from investors for low cost, simple, transparent and well-structured fixed income solutions and, as underscored by the highly competitive nature of these new products, Invesco PowerShares is determined to be the leading provider of such ETFs in Europe.”