WisdomTree has launched two new ETFs offering access to CoCo bonds as well as to a collateralised put write option strategy on Xetra and Börse Frankfurt.
The WisdomTree AT1 CoCo Bond UCITS ETF – USD is designed to enable investors to participate in the performance of CoCo bonds (bonds that obligatorily convert to equity when triggered) issued by European financial institutions and are denominated in euros, US dollars or pounds sterling.
CoCo bonds are a form of hybrid debt security that are intended to either convert into equity or have their principal partially or completely written off, or written off by the issuer with the option of revaluation under certain circumstances. CoCos, like subordinated bonds, serve to absorb the issuer’s capital losses before other higher-ranking liabilities.
The WisdomTree CBOE S&P 500 PutWrite UCITS ETF – USD Acc is designed to enable investors to invest in a collateralised put write option strategy. This strategy initially comprises the sale of S&P 500 put options traded on the Chicago Board Options Exchange (CBOE). The proceeds generated are then invested in one and three-month US Treasury bills.
Ongoing annual charges are 0.50 per cent with a distributing distribution policy on the bond ETF, and 0.38 per cent on the CBOE PutWrite ETF with an accumulating distribution policy.
