UBS Asset Management ( UBS AM) has launched three new Ireland-domiciled Ucits ETFs offering investors exposure to overnight benchmark rates across major currencies.
The ETFs aim to provide an index-based alternative to cash with lower interest rate risk and the potential for enhanced yield.The products include the UBS EUR Overnight Rate SF Ucits ETF (tracking the €STR or Euro Short-Term Rate), the UBS USD Overnight Rate SF Ucits ETF (tracking SOFR or Secured Overnight Financing Rate), and the UBS GBP Overnight Rate SF Ucits ETF (tracking SONIA or Sterling Overnight Index Average). All three funds use daily compounding to reflect the performance of their respective overnight rates via Solactive indices.
Thematic ETFs see steady growth
The launch comes as investors navigate uncertainty around future interest rate cuts, with overnight instruments offering relatively attractive returns in the current environment, shared the asset manager. These ETFs use a synthetic, swap-based structure, which allows them to replicate index performance while delivering an additional positive spread over the benchmark rates.
The funds will be listed on SIX, Xetra, Borsa Italiana and the London Stock Exchange. The ETFs are registered for sale in Austria, Switzerland, Germany, Denmark, Spain, Finland, France, Italy, Liechtenstein, Luxembourg, Netherlands, Norway, Sweden and the UK.
Clemens Reuter, head ETF & index fund client coverage, UBS AM, commented: “We are delighted to offer our clients our first Ucits ETFs with overnight rate exposure, where investors can efficiently access short-term cash and liquidity management tools.”
