Two US firms have made separate exchange-traded fund (ETF) listings on the London Stock Exchange, including Vanguard with a product that adds to development in the fixed income ETF market.
Vanguard has launched a US dollar-denominated corporate bond ETF claiming a first for the European bond ETF market which has been criticised for a lack of innovation.
The other ETF is from WisdomTree which has listed a fund linked to S&P 500 volatility that uses put options.
Vanguard’s product, which is also listed on Deutsche Börse, is called the Vanguard USD Corporate 1-3 Year Bond Ucits ETF and gives access to global short-dated investment grade corporate debt. The firm said it is the only short-term corporate bond ETF offering a 1-3 year benchmark.
The ETF tracks the Bloomberg Barclays Global Aggregate Corporate: USD Index 1-3 Year.
WisdomTree, which last week also announced the launch of a fixed income ETF investing in “CoCo” bonds – has now listed the WisdomTree Cboe S&P 500 PutWrite Ucits ETF.
The fund tracks Cboe S&P 500 PutWrite Index and invests in one and three-month Treasury bills, while selling or “writing” S&P 500 put options.
According to WisdomTree, the index consistently displayed a much smaller drawdown during market downturns; providing 98% of the return of the S&P 500, but only 66% of the volatility from June 30, 1986, through year-end 2017.
WisdomTree said the ETF offered a “unique source of return by delivering an institutional options strategy in a widely accessible Ucits ETF wrapper”.
Christopher Gannatti, WisdomTree head of research in Europe, said: “With the S&P 500 at or near record highs and investors having enjoyed a strong run of performance, we believe that it could be time to position for greater future volatility and downside risk.”
Vanguard has $5 trillion (€4.26 trillion) and WisdomTree has approximately $64.1 billion in assets under management.
©2018 funds europe
