Lombard and ETF Securities in latest bond smart beta launch

ETFs1A partnership between Lombard Odier Investment Managers and ETF Securities has resulted in a smart beta fixed income fund that invests in emerging market local currency government debt.

The exchange-traded fund (ETF) uses a fundamental benchmark, which means it can invest in China and India, countries that are excluded from traditional cap-weighted benchmarks.

The fund, the latest from the partnership, also invests in developed market debt that meets the index’s fundamental criteria.

Fixed income investing is a relatively new area for smart beta. Methods used in equity smart beta are being replicated in the bonds sector.

Lombard and ETF Securities say this is the latest addition to “Europe’s first range of fundamental fixed income ETFs”.

The ETFS Lombard Odier IM Emerging Market Local Government Bond Fundamental GO Ucits ETF is listed on the London Stock Exchange and has a 0.55% total expenses ratio annually.

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