Schroders has launched two active fixed income exchange-traded funds (ETFs) to expand the firm’s coverage of global credit.
The Schroder USD Investment Grade Corporate Bond Active UCITS ETF will hold predominantly US dollar-denominated fixed and floating-rate corporate bonds issued worldwide.
The fund, which will look to exploit structural pricing inefficiencies in corporate bond markets, will be run by Julien Houdain, Schroders’ head of global fixed income, and portfolio managers Martin Coucke and Francois Carrie.
Its process will blend quantitative bond analysis with a risk model that evaluates the risk characteristics of individual bonds rather than sector-wide groups, followed by portfolio optimisation to build a diversified set of holdings that can outperform the Bloomberg US Corporate Total Return Index after fees over three to five years.
Meanwhile, the Schroder CoCo Financial Credit Active UCITS ETF will invest at least two-thirds of assets in contingent convertible bonds issued by global financial institutions and denominated in US dollars, euros or sterling.
Managed by Cindy Wang, the strategy will use bottom-up credit research to identify opportunities across regions, financial sub-sectors and credit ratings, targeting income and capital growth above the ICE BofAML Contingent Capital Index (hedged to USD) over three to five years.
These latest launches, which will be listed on the London Stock Exchange from today, follow the launch of Schroders’ first fixed income UCITS active ETF in September last year.
Tom Stephens, head of ETFs at Schroders, said: “These additions mark the next stage of our strategic build-out across fixed income and reinforce our ambition to develop a broad active ETF platform across asset classes.
“The launch of our CoCo Financial Credit and USD Investment Grade Corporate Bond strategies strengthens our fixed income offering and gives clients greater choice in how they access Schroders’ active fixed income expertise.”