Invesco launches sterling corporate bond ETF on LSE

Mar 13th, 2020 | By | Category: Fixed Income

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Invesco has expanded its range of fixed income ETFs in Europe with the launch of a sterling corporate bond fund.

Invesco launches sterling corporate bond ETF on LSE

The fund provides exposure to sterling-denominated, investment-grade corporate bonds issued by companies in developed markets.

The Invesco GBP Corporate Bond UCITS ETF (IGCB LN) has listed on the London Stock Exchange and been seeded with £25 million in assets under management.

The fund trades in GBP. Income is distributed to investors on a quarterly basis.

The ETF is linked to the Bloomberg Barclays Sterling Liquid Corporate Bond Index which comprises sterling-denominated, investment-grade, fixed-rate securities with at least one year remaining until maturity.

Bonds must be issued by companies in developed markets and have at least £350 million par amount outstanding. Rebalancing occurs on a monthly basis.

The index consists of 840 securities and offers a current yield of 4.01% with an effective duration of 8.48 years. The average credit rating of bonds within the index is A-.

The ETF comes with an expense ratio of 0.10% which matches the cost of a similar ESG-screened sterling corporate bond ETF that Invesco unveiled two weeks ago: the Invesco GBP Corporate Bond ESG UCITS ETF (IGBE LN). IGBE tracks the Bloomberg Barclays MSCI Sterling Liquid Corporate ESG Weighted Bond Index which leverages research from MSCI to exclude issuers in controversial industries and tilt towards those with higher ESG ratings.

Alternative vehicles for obtaining sterling-denominated corporate bond exposure include the SPDR Bloomberg Barclays Sterling Corporate Bond UCITS ETF (UKCO LN). This fund tracks the same index, houses $260m in AUM, and comes with an expense ratio of 0.10%.

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