Bringing you live news and features since 2006 

Invesco launches Europe’s first variable rate preferred shares ETF


Invesco is launching a new ETF that aims to provide investors with an attractive yield versus traditional US investment grade and high yield bonds.  

The yield moves in line with changes in interest rates and is comparable to high yield bonds but in an asset class with historically lower volatility. The Invesco Variable Rate Preferred Shares UCITS ETF, which is launching on the LSE, is the only ETF in Europe that offers targeted exposure to this USD250 billion market.
Chris Mellor, Head of EMEA ETF Equity Product Management at Invesco, says: “With interest rates low, income remains a sought-after theme, particularly in Europe. Investors wanting higher yields are often forced to take on more risk than they’re comfortable with. Variable rate preferred shares are currently yielding around 5 per cent, just above what you would get from high yield bonds, while typically having an investment grade credit rating. They also have lower duration, meaning less interest rate risk.”
Preferred shares are hybrid securities, primarily issued by banks and other financial companies who want to raise Tier 1 capital without diluting the value of common equity shareholders. They are technically equities but behave more like bonds because of certain characteristics, including having defined distributions and long-dated fixed maturities. The difference with the variable rate variety is that yields move in line with interest rates, which could make them an appealing choice when rates are rising.

Latest News

Figment Europe, a provider of institutional staking infrastructure, writes that it is solidifying its presence in the heart of Europe’s..
Saving and investing app, Moneybox, has doubled the number of ETFs available on the platform, in the light of ‘growing..
Global X ETFs has announced the appointment of Ryan O'Connor as its Chief Executive Officer effective as of April 8, 2024. ..
Value-driven structured credit investing firm, Angel Oak Capital Advisors, LLC, has announced the completed conversions of two of its mutual..

Related Articles

Sal Esposito, Zacks Investment Management
Zacks Investment Management started doing investment research in 1978 and in 1992 started its investment management arm, initially with SMAs...
Jeremy Senderowicz, Vedder Price
Jeremy Senderowicz, a member of the Investment Services Group at law firm Vedder Price, has witnessed a steady upswing in...
Graham MacKenzie, Toronto Stock Exchange
The evolution of ETFs has been a multi-decade experience for Toronto Stock Exchange says Graham MacKenzie, managing director, Exchange Traded...
Frank Koudelka, State Street Global Services
ETF data provider and ETF Express data partner, Trackinsight, has published its Global ETF Survey 2024 Report: ‘50+ Charts on...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by