Tabula Investment Management has significantly reduced the fee charged on the €60 million Tabula EUR HY Bond Paris-Aligned Climate UCITS ETF, the first euro high yield bond ETF to adhere to the carbon reduction goals of the Paris Agreement.
The Tabula EUR HY Bond Paris-Aligned Climate UCITS ETF now comes with an expense ratio of 0.25%.
Effective immediately, the ETF’s expense ratio has been halved from 0.50% to 0.25%, matching the cost of Tabula’s Paris-aligned euro investment-grade bond ETF – the €180m Tabula EUR IG Bond Paris-aligned Climate UCITS ETF.
Tabula offers a further two Paris-aligned fixed income ETFs providing exposure to an ultra-short portfolio of investment-grade euro corporate debt and a globally diversified portfolio of fallen angel bonds. These funds are priced at 0.15% and 0.50%, respectively.
All four ETFs are classified as Article 9 products under the EU Sustainable Finance Disclosure Regulation (SFDR).
Michael John Lytle, CEO of Tabula Investment Management, commented: “Investors continue to seek robust Article 9 Paris-aligned solutions for their core portfolio positions. The unique characteristics of our EUR HY Bond Paris-Aligned Climate UCITS ETF make it particularly attractive for investors looking for higher yields in the current interest rate environment. To support further potential inflows into the ETF, we have cut its fee by half to 0.25% making it not only unique but very aggressively priced.”
Methodology
The Tabula EUR HY Bond Paris-Aligned Climate UCITS ETF is linked to the iBoxx MSCI EUR High Yield Paris Aligned Capped Index which begins with an initial universe of sub-investment grade, euro-denominated corporate bonds with at least one year remaining to maturity. Eligible issuers must be domiciled in a developed market and have a minimum notional outstanding of €250 million.
The methodology sets out to deliver a superior ESG profile and significantly lower greenhouse gas emissions compared to this parent universe.
To meet the EU standards for a Paris-aligned benchmark (PAB), the index excludes UN Global Compact violators as well as firms involved in fossil fuels, tobacco, and controversial weapons. It also weights its constituents to deliver an immediate 50% reduction in greenhouse gas emissions as well as a further 7% annual decarbonization going forward through future rebalances.
The index goes further, however, delivering additional ESG benefits such as the removal of companies involved in nuclear power, gambling, alcohol, and civilian firearms, and seeking to increase the weight of firms with strong or improving overall ESG ratings, based on MSCI’s evaluation of sector-specific ESG risks.
The ETF is listed on Xetra (THEP GY), Borsa Italiana (THEP IM), and BX Swiss (THEP SW) in euros.