Amundi has launched the Amundi ETF Floating Rate USD Corporate UCITS ETF.

European asset manager Amundi has launched an exchange-traded fund exposed to US dollar-denominated floating rate notes.

The Amundi ETF Floating Rate USD Corporate UCITS ETF will give investors exposure to the Markit iBoxx USD Liquid FRN Investment Grade Corporates 100 index, which is rebalanced monthly. Issuers will have a maximum weighting of 5 per cent.

The fund will invest in holdings of between 40 and 100 highly liquid dollar-denominated FRNs issued by corporates from developed countries.

Amid a low-interest rate backdrop, FRNs shield portfolios from any rate change, says Amundi. The products have a low price sensitivity as the variable coupon moves in line with interest rates.

The fund uses liquidity screening to pick the most liquid bonds, looking at trading volumes and number of trades. 

“Our innovative floating rate notes range is of particular interest in today’s market for investors seeking a source of income in a low rate environment and a hedge in the event of a rise in EUR and US short term rates,” said Amundi's global head of ETF, indexing and smart beta, Valerie Baudson.

As of the end of April, Amundi's ETF arm managed over €18 billion ($19.7 billion) in assets.