UBS Asset Management (UBS AM) has announced the launch of two new ETFs that aim to deliver enhanced yield, while preserving the risk profile of their underlying treasury indexes.
The UBS EUR Treasury Yield Plus UCITS ETF and UBS USD Treasury Yield Plus UCITS ETF aim to outperform their respective Bloomberg Treasury indexes by targeting higher option-adjusted spread (OAS), while maintaining tight alignment on duration, credit quality, and country exposure.
Portfolio construction
· Universe definition: Each ETF starts with its respective Bloomberg Treasury Index (EUR or USD) and expands the opportunity set to include high-quality sovereign, supranational, and agency (SSA) bonds, which can offer a higher yield than government bonds.
· Optimisation: The SSA bonds are selected using a proprietary rules-based model that maximises OAS while adhering to strict constraints on rating, country, sector, duration, and curve risk.
· Dynamic allocation: The Portfolio Manager may use their discretion to further enhance the portfolio’s yield and/or risk profile.
André Mueller, Head of Client Coverage, UBS AM, says: “The rapidly increasing assets in enhanced fixed income ETFs signals growing investor demand for funds that go beyond traditional passive benchmarks. UBS AM has longstanding expertise in rules-based strategies so I’m delighted we can offer this capability, for the first time, to a wider range of clients through the convenient, transparent and efficient ETF wrapper.”
The fund is registered for sale in Austria, Denmark, Finland, France, Germany, Ireland, Italy, Liechtenstein, Luxembourg, Netherlands, Norway, Spain, Sweden, Switzerland, and the United Kingdom.
