WisdomTree has launched a bond ETF dedicated to EU coronavirus recovery efforts in what has been called a world first.
The ETF will invest in bonds issued by the EU to finance initiatives designed to mitigate unemployment risks as well as repair economic and social damage caused by the coronavirus pandemic.
The ETF provider highlighted that the bloc is expected to issue €850 billion of bonds focusing on the recovery through the initiatives SURE and NextGeneration EU.
SURE is a temporary tool aimed at mitigating unemployment risks, while NextGeneration EU focuses on repairing the immediate socio-economic damage brought on by the virus.
The WisdomTree European Union Bond Ucits ETF (EUBO) fund tracks the iBoxx EUR European Union Select Index, which contains bonds issued by the EU to fund these programmes.
Together, NextGeneration EU and the EU’s long-term budget form the largest ever stimulus package financed through by the EU totalling €1.8 trillion, WisdomTree said.
Lidia Treiber, director of research at WisdomTree said, “The Covid-19 crisis has led to Europe unifying on several fronts to tackle the virus and stimulate an economic recovery.
“EU bonds could add another highly rated and liquid instrument with the capacity to become a larger share of the European Central Bank’s asset purchasing programmes.”
EUBO is currently listed on Borsa Italiana and Börse Xetra.
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