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Invesco expands core fixed income range with new GBP Corporate Bond UCITS ETF

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Invesco has broadened its range of core fixed income ETFs with the launch of the Invesco GBP Corporate Bond UCITS ETF. With an ongoing charge of 0.10 per cent per annum, the ETF offers a cost-effective way to gain exposure to this asset class.

 
Paul Syms, Head of ETF Fixed Income Product Management at Invesco, says: “The current market volatility and widespread concerns around the coronavirus pandemic is driving a risk-off environment. Government bond yields have tumbled to all-time lows while credit yields have risen at a time when the Bank of England’s policy response is designed to support both asset classes, meaning credit could be looking more attractive. The wider spreads between government and investment grade credit is offering investors higher yields without having to venture too far out the credit quality spectrum.”
 
Matt Brennan, Head of Passive Portfolios at AJ Bell, says: “The move by Invesco to launch a new product into this space, especially at a time of uncertainty, shows its deep commitment to the fixed income ETF sector, and offers a much needed alternative within the asset class. Invesco’s heritage in fixed income is well known and we have confidence the product will scale quickly, especially given its competitive pricing both in terms of headline costs and spreads.”

The ETF aims to deliver the performance of the Bloomberg Barclays Sterling Liquid Corporate Bond Index, net of fees. The Index comprises investment grade, fixed-rate securities denominated in sterling with at least £350 million par amount outstanding. Individual issuers are capped at 4% of the Index. The portfolio manager may use sampling techniques to match as closely as practical the characteristics of the Index as well as being pragmatic on monthly rebalancing. 
 
The new Invesco ETF is the latest addition to the firm’s fixed income range, which includes USD- and EUR-denominated corporate bonds, as well as low-cost exposures to government bonds with a choice of currencies and maturity buckets. These core exposures are complemented by more innovative products that offer investors access to specialist segments.

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