By Matthew J. Bartolini, Head of SPDR Americas Research, State Street Global Advisors.

ETFs support the Federal Reserve’s goal by providing broad market access to a diverse set of firms through a single investment, trading flexibility and transparency. Details on the size and scope of the program have not been finalized, but we can glean some insights about what may be in focus.

Invesco has expanded its range of fixed income ETFs in Europe with the launch of a sterling corporate bond fund. The Invesco GBP Corporate Bond UCITS ETF (IGCB LN) has listed on the London Stock Exchange and comes with an expense ratio of 0.10%. The fund is linked to the Bloomberg Barclays Sterling Liquid Corporate Bond Index.

BlackRock has unveiled three new ETFs in Europe as part of the issuer’s growing suite of environmental, social, and governance products. Two of the ETFs are ESG equivalents of existing iShares ETFs that provide broad exposure to eurozone equities and investment-grade USD corporate bonds, while the third ETF targets companies that are aligned with the theme of ‘smart cities’. Stephen Cohen, Head of iShares EMEA at BlackRock, commented, “Providing ESG equivalents to our flagship products while providing innovative thematic products will further steepen the ETF adoption curve.”

UBS Asset Management has launched a new ETF offering access to China’s onshore equity market. The UBS ETF (IE) MSCI China A SF UCITS ETF has listed on SIX Swiss Exchange, LSE and Xetra, and provides exposure to the MSCI China A Index of Mainland China, renminbi-traded large- and mid-cap companies. Andrew Walsh, Head of ETF & Passive Specialists – UK & Ireland, UBS Asset Management, commented, “China’s significant role in the global economy means allocations to the country are no longer a niche investing approach. Given its weight, we believe China should be treated as a standalone allocation of its own. “

Invesco has introduced a new fixed income ETF in Europe with the launch of the Invesco GBP Corporate Bond ESG UCITS ETF (IGBE LN) on London Stock Exchange. The fund, which has been seeded with £25m and comes with an ongoing charge of 0.10%, combines Bloomberg’s fixed income indexing capabilities with MSCI’s ESG research to provide ethically screened exposure to sterling-denominated corporate bonds.

Vanguard has trimmed the fees charged on four of its US-listed ETFs. The funds include one US equity ETF targeting mid and small-cap stocks, and three fixed income ETFs providing exposure to the short-, mid-, and long-term segments of the USD bond market. While the fee cuts are of a magnitude of only one or two basis points, the ETFs in question are substantial, ranging from $4.8 billion to $21.9bn in assets under management.

Lyxor has cross-listed the Lyxor Euro Corporate Bond UCITS ETF on Nasdaq Stockholm. The ETF is linked to the Bloomberg Barclays MSCI EUR Corporate Liquid SRI Sustainable Index, which provides exposure to the euro-denominated corporate bond market while incorporating socially responsible selection criteria. The new listing hedges currency exposure between the euro and the Swedish krona.

By the Cross Asset and ETF Research Team at Lyxor Asset Management.

High-yield bonds could be a useful addition to many investors’ portfolios as they offer attractive return potential and good diversification benefits. And yet they’re not without risk. One way to reduce the risk of such an allocation could be to invest in an index that takes ESG criteria into account in its construction process.

Lyxor has launched three new fixed income ETFs providing exposure to US dollar-denominated, euro-denominated, and global high-yield corporate bond markets while incorporating sustainability criteria. The funds are based on Bloomberg Barclays MSCI Sustainable SRI Indices and are being rolled out on the LSE and Borsa Italiana. Philippe Baché, Head of Fixed Income at Lyxor ETF, commented, “By applying an ESG lens to the high yield bond universe, we are able to provide a significant move away from parent indices offering a potentially more conservative risk profile.”

Europe’s largest asset manager Amundi has announced that its ETF business surpassed the €50 billion assets under management threshold in 2019. The milestone was reached through a combination of healthy market performance and robust net inflows with Amundi noting that demand was particularly strong for its suites of low-cost core and socially responsible ETFs. Fannie Wurtz, Head of Amundi ETF, Indexing and Smart Beta, commented, “In a highly dynamic market environment, these strong results demonstrate investors’ continued confidence in Amundi ETF and confirm our position as a leading ETF provider.”