M&G has launched its fifth active ETF with a Dublin-based fund focused on top-rated corporate debt known as collateralised loan obligations.
The euro-denominated M&G AAA EUR CLO Active UCITS ETF (MNGA) will invest at least 80% in triple A-rated CLOs with the remaining 20% limited to highly graded CLOs rated AA or above.
Matt Wardle, a fixed income fund manager and asset-backed securities (ABS) specialist who has been with the firm for 18 years, will run the fund with the support of M&G’s credit research team.
After raising €200m (£172m) from “external investors”, MNGA listed on the London Stock Exchange (LSE), Deutsche Borse and Borsa Italiana with an annual total expense ratio (TER) of 0.25%.
It aims to deliver a total return of income and capital growth ahead of the JP Morgan European Collateralized Loan Obligation AAA index over three‐year periods.
Our view
David Batchelor, senior analyst at QuotedData, said: “M&G’s latest launch shows how active ETFs are moving beyond mainstream equity and bond exposures into more specialist areas of fixed income. AAA-rated CLOs may appeal to investors looking for higher-quality credit exposure with an income focus, while the active structure gives M&G scope to use its credit research capability in a market where underlying loan quality, manager selection and deal structure matter. The €200m seed raise also suggests there is institutional appetite for more nuanced fixed income ETF products, particularly where investors are seeking diversification beyond traditional corporate bond funds”.
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