Lombard Odier Investment Managers and ETF Securities have partnered to provide a range of Ucits-compliant fundamentally-weighted fixed income ETFs.
The initial product listing on the London Stock Exchange, planned for mid-April, will see the launch of ETFs providing fundamentally-weighted exposure to global government bonds, global corporate bonds and European corporate bonds. An emerging market local bond ETF is also scheduled to be launched in early May.
The new ETFs aim to provide smart beta bond opportunities to a wide base of investors through wealth managers, financial advisers and investment platforms. They can be used by both retail and institutional investors to provide a core allocation to fixed income, with intraday liquidity.
Lombard Odier IM’s fundamentally-weighted approach focuses on assessing fundamental factors for government and corporate issuers, such as GDP or revenues, in order to produce a favourable balance between risk and return.
Hubert Keller, chief executive officer, Lombard Odier IM, says: “We strive to offer bond investors greater diversification by lending based on issuers’ ability to repay rather than their ability to borrow. We use fundamental factors, based on the real economy, to determine the most appropriate allocation."
Lombard Odier IM’s Geneva-headquartered business managed $49 billion (€45 billion) on behalf of clients, at the end of December 2014.
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