What's New In Investments, Funds? - UBS, BlackRock
The latest in investments and fund management from across Europe.
UBS has partnered with asset management titan BlackRock to launch an exchange-traded fund that taps into returns from multilateral development bank debt.
The launch is UBS GWM's first collaboration with an external fund manager on a development bank bond ETF.
The ETF will be included in certain UBS Global Wealth Management mandates and offered on GWM platforms as an alternative to traditional high-quality fixed income investments such as government bonds. MDB debt, UBS said, offers strong – often AAA – credit ratings, high liquidity, and a higher yield than US Treasuries.
The funds raised by MDB debt are also focused on advancing the United Nations’ Sustainable Development Goals, or SDGs.
Known as the the iShares USD Development Bank Bonds UCITS ETF, it tracks the FTSE World Broad Investment-Grade USD MDB Bond Capped Index.
Supported by initial UBS seed capital, the ETF has assets of more than $120 million. In total, UBS oversees more than $1 billion of client assets in development bank debt.
The FTSE index offers exposure to dollar debt securities issued by African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, International Development Association, and the World Bank Group's International Bank for Reconstruction and Development and International Finance Corporation. Each issuer carries an AAA credit rating from at least one major rating agency, has the US as a member, and has pledged support for critical UN SDGs.
"Our clients see development bank debt as an attractive means of diversifying their portfolios and focusing them on the United Nations Sustainable Development Goals. Exchange-traded funds will continue to represent an important route for clients to access this growing asset class,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said.
The fund will be distributed in Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the UK.