Tabula launches Paris-aligned ultrashort bond ETF

investmentweek.co.uk:

The Tabula EUR Ultrashort IG Bond Paris-Aligned Climate UCITS ETF (TUCP GY) launched on 29 September 2023 with €20m in assets

The Tabula EUR Ultrashort IG Bond Paris-Aligned Climate UCITS ETF is classified as Article 9 under SFDR and provides «significantly lower» portfolio GHG emissions, as well as an «enhanced» ESG profile compared to existing ultrashort solutions, the firm said.

The investment strategy is designed to limit global warming to 1.5°C in accordance with the Paris Agreement, while integrating ESG criteria into the security selection process.

Key features of the strategy include a 50% initial reduction in GHG emissions and a 7% year-on-year annual reduction, ESG screening and liquidity and holdings constraints to improve the liquidity profile.

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The ETF aims to deliver a similar return to the broad EUR ultrashort IG bond index, which has a current 12-month gross yield of 4.3% and a duration of approximately 0.4 years.

In developing the ETF, Tabula collaborated with Solactive and ISS ESG to create its Paris-aligned benchmark for euro-domiciled ultrashort investment grade bonds, the Solactive ISS Paris Aligned Select 0-1 Year Euro Corporate IG index.

Tabula CEO Michael John Lytle said: «Meeting the goals of the Paris Agreement requires a multi-pronged approach. Investors must combine targeted allocations to specialist climate solutions with a shift of large asset pools into broad climate-friendly investments.

»TUCP is the first Paris-aligned ultrashort product and joins our existing stable of euro investment grade, global fallen angels and euro high yield Paris-aligned funds. The latest launch shows our commitment to providing investors