Amundi Investment Solutions has launched a new low-cost active ETF, the Amundi EUR Corporate Bond Active UCITS ETF, the latest addition to a growing wave of fixed income active ETF launches as investors return to bond markets in search of income and diversification.
The fund’s benchmark is the Bloomberg Euro Aggregate Corporate Index, a sub-index of the Bloomberg Euro Aggregate Index, which consists of investment grade (BBB- or higher) euro-denominated corporate bonds. As such, it offers exposure to relatively high-quality issuers while still providing a yield pick-up over government bonds, reflecting the additional credit risk inherent in corporate debt.
The top ten holdings are dominated by bank bonds, with seven issued by European financial institutions. This reflects the structure of the euro investment grade market, where banks are among the largest issuers, although it also means the portfolio will have meaningful exposure to the financial sector.
Like most funds in this space, performance will be influenced both by movements in eurozone interest rates and changes in credit spreads. With interest rates still elevated relative to recent history, investor demand for corporate bond exposure has picked up, as investors look to lock in yields while maintaining exposure to relatively high-quality issuers.
The launch also highlights Amundi’s continued push into the active ETF space in Europe, where asset managers are increasingly looking to combine the low-cost, liquid structure of ETFs with modest active tilts.
Our view
David Batchelor, senior analyst at QuotedData, said: “There is no sign of the recent spate of fixed interest active ETF launches slowing, with Amundi EUR Corporate Bond Active UCITS ETF (BCRP) the latest cab off the rank. It will seek to outperform, after fees, the Bloomberg Euro Aggregate Corporate Index over 3 years. This is very much in the “index plus” category, that we doubt will diverge from the benchmark to any great extent, and therefore is being offered at a low fee of 20bps. This is the fourth European active ETF offered by Amundi, with assets totalling $650m thus far, including $50m in this new fund”.
