Amundi adds dollar-denominated investment-grade corporate bond ETF to low-cost ‘Prime’ suite

Sep 24th, 2019 | By | Category: Fixed Income

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Amundi has expanded its suite of ultra-low-cost ETFs – branded ‘Prime’ – with the launch of a new fund tracking the US dollar-denominated investment-grade corporate bond market.

Amundi adds US corporate bond ETF to low-cost ‘Prime’ suite

Amundi has added a US dollar-denominated corporate bond ETF to its low-cost ‘Prime’ suite.

The Amundi Prime US Corporates UCITS ETF DR (PR1P GR) has listed on Xetra in euros and is expected to cross-list on London Stock Exchange, Euronext Paris, and Borsa Italiana in due course.

In line with other funds in Amundi’s Prime suite, the ETF is offered with an expense ratio of just 0.05%.

Fannie Wurtz, Head of Amundi ETF, Indexing, and Smart Beta, commented, “Investors’ search for yield means corporate bonds have been the most popular part of Europe’s ETF market this year.

“We already offered euro corporate bonds at 0.05%, but now our clients also demand ultra-low-cost US credit exposure. That is why we created a Prime US Corporates ETF, Europe’s lowest cost US corporate bond ETF, to ensure we could better serve our investors.”

The fund is linked to the Solactive USD Investment Grade Corporate Bond Index which consists of more than 5,000 corporate debt securities denominated in US dollars with an amount outstanding of at least $400 million, at least 18 months remaining until maturity, and an investment-grade rating.

The index is weighted by market value and rebalanced monthly. It currently has an average yield to maturity of 3.06% and a duration of 7.83 years.

The new launch brings the total number of Amundi Prime ETFs to ten, consisting of five equity and five fixed income funds. The equity funds cover the global, European, eurozone, US, and Japanese markets, while the fixed income funds target global, US, and euro government bonds, euro-denominated corporate bonds and now, with this latest launch, US dollar-denominated corporate bonds.

Each fund tracks a Solactive index using direct physical replication and utilizes an ethical screen which excludes firms with operations in controversial weapons.

Wurtz said, “Attracting more than €500 million of assets under management already, the Amundi Prime range has shown that it is the right solution for investors looking for simple and cost-efficient portfolio building blocks. Adding US corporates to the range demonstrates our ongoing commitment to clients, and our ability to help them navigate challenging market conditions.”

Timo Pfeiffer, Head of Research at Solactive, added, “The launch of the Amundi Prime US Corporates UCITS ETF DR appeases the demand of investors looking for alternative fixed income vehicles in today’s low-interest-rate environment. The new ETF is a logical extension of the existing Prime ETF range, and we are grateful that Amundi puts its trust in Solactive’s work and chooses us yet again to set up this new benchmark ETF to enhance its benchmark ETF offering.”

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