Lyxor expands Euro govies range with ultra long-duration ETF

Mar 11th, 2015 | By | Category: Fixed Income

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Lyxor Asset Management has announced the launch of a new exchange-traded fund providing access to ultra long-duration eurozone bonds: the Lyxor Ultra Long Duration Euro Govt FTSE MTS 25+Y UCITS ETF (DR) C-EUR.

Lyxor expands Euro govies range with ultra long-duration bond ETF

Lyxor has expanded its European government bond line-up with the launch of an ultra long-duration bond ETF on Euronext.

The ETF, which has been listed on Euronext Paris, is linked to the FTSE MTS Eurozone Government Bond IG 25Y+ Index, an index tracking the performance of investment-grade eurozone governments bonds with a maturity of 25 years or more.

The index is composed of securities with maturities of more than 25 years, issued by the governments of eurozone member states with investment-grade credit rating and with a minimum outstanding size of EUR 2 billion.

The index is part of the part of the wider FTSE MTS Eurozone Government Indices, a series of indices capturing the European sovereign bond market.

Arnaud Llinas, Head of Lyxor ETFs and Indexing, said: “Lyxor is always looking for new investment opportunities to meet investor needs and is expanding its fixed income ETF range accordingly. We are pleased to further develop our cooperation with a leading index provider, such as FTSE MTS, in order to bring efficiency and innovation to the ETF market.”

Mirela Vlad, Regional Director FTSE MTS Indices, added: “We are pleased that Lyxor has once again chosen FTSE MTS to provide the benchmark for its latest fixed income ETF. Our indices reflect a market driven approach to capturing the asset class, moving away from single source pricing and instead using real, tradable prices. This focus on accurate market representation, alongside an ongoing emphasis on transparency and strong governance, offers a solid foundation for innovative ETFs.”

In the current low-yield environment, fixed income investors are seeking investment opportunities able to generate adequate return while respecting constraints of credit rating and liquidity. Long-duration investment-grade government bonds tend to represent a source of higher yield compared to equivalent issuances with a lower duration, without exposing investors to the higher credit risk generally associated to issuers with a lower credit rating.

Lyxor is one of the leading ETF providers on European government bonds indices with combined assets under management in Euro govies of EUR 5 billion and a comprehensive range of available maturities.

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