Invesco has this week launched five Euro government bond ETFs, with a choice of four maturity ranges as well as broad exposure across the maturity spectrum.
All the ETFs are being listed on Xetra and Borsa Italiana and, with ongoing charges of just 0.10% per annum, are among the lowest cost exposures to European sovereign debt.
Paul Syms, Head of EMEA ETF Fixed Income Product Management at Invesco, said: “Many investors have European government bonds for core allocation to diversify and reduce their portfolio volatility. We have developed these new ETFs with the aim of delivering the right balance between performance and broad market exposure. In addition, given the persistent low yields in Europe, we believe the low costs of these ETFs will attract investors who are increasingly price-sensitive.”
The Bloomberg Barclays Euro Government Select Indices have been chosen as the benchmarks for the targeted maturities products. These indices provide exposure to the five most liquid economies in the Eurozone: France, Germany, Italy, the Netherlands and Spain.
The Bloomberg Barclays Euro Treasury Majors Bond Index has been chosen for the all-maturities ETF. This benchmark includes the five countries in the other indices plus Austria, Belgium, Finland, Ireland and Portugal. The addition of these countries is intended to provide broader Eurozone exposure.
Paul Syms added: “With $33 billion in AuM, Euro government bonds is the second-largest fixed income ETF category in Europe. Over the past 12 months, there has been in excess of $5 billion of flows into this sector and, in today’s uncertain environment, we would expect this allocation to increase as investors adjust their risk profiles. Currently, we believe the backdrop for Euro government bonds is supportive, with the ECB expected to announce further easing in the September meeting.”
The new Euro government bond ETFs are part of Invesco’s core range of low-cost exposures to major fixed income, equity and commodity benchmarks. The latest ETFs expand the firm’s fixed income offering and follow the launch of low-cost US Treasury and UK Gilts ETFs earlier in 2019 in addition to Floating Rate Notes and AT1 ETFs in 2018.