Invesco unveils Europe’s lowest cost gilts ETFs

Mar 25th, 2019 | By | Category: Fixed Income

Invesco has launched two new ETFs offering the lowest-cost exposure to UK government bonds, or gilts, of any competing product in Europe.

Paul Syms, Head of EMEA ETF Fixed Income Product Management at Invesco

Paul Syms, Head of EMEA ETF Fixed Income Product Management at Invesco.

The Invesco UK Gilt 1-5 Year UCITS ETF (GLT5 LN) provides exposure to short-term gilts, bonds with remaining maturities between one and five years.

While investors looking for exposure across the yield curve – bonds with remaining maturities up to 55 years – can now consider the Invesco UK Gilts UCITS ETF (GLTP LN).

Each ETF is offered with a total expense ratio (TER) of just 0.06% and makes distributions to investors on a quarterly basis.

The funds’ underlying indices – the Bloomberg Barclays UK Gilt 1-5 Years Index and the Bloomberg Barclays Sterling Gilt Index – includes only GBP-denominated, fixed-rate, nominal debt issued by HM Treasury. The funds invest directly in the constituents of their underlying indices.

Paul Syms, Head of EMEA ETF Fixed Income Product Management at Invesco, said, “Investors, particularly in the UK, are faced with political uncertainty around Brexit, as well as more general questions about the economy, interest rates, currencies, and equity markets. For investors who want to take some risk off the table, or simply diversify their portfolios, UK government bonds may offer an attractive solution.”

The funds follow the launch of Invesco’s US Treasury bond ETF range in January, comprising four funds offering targeted exposure to different sections of the US government bond yield curve: 1-3 years, 3-7 years, 7-10 years, and 1 to 30 years.

These ETFs also maintain TERs of 0.06% and, similarly, are the lowest cost US Treasury bond ETFs listed in Europe – a factor which has helped them to attract over $1bn in assets.

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