Legal & General Investment Management (LGIM) has expanded its suite of fixed income ETFs with the launch of an of ex-banks corporate bond ETF, ETF Stream can reveal.
The L&G Corporate Bond ex-Banks Higher Ratings 0-2Y UCITS ETF XBNG is listed on the London Stock Exchange (LSE), Euronext Milan and Deutsche Borse with a total expense ratio (TER) of 0.12%.
XBNG tracks the J.P. Morgan Global Credit index (GCI) Ultra Short ex Banks 2% Issuer Capped index which offers exposure to highly rated Euro- and USD- denominated corporate bonds with a short duration and excludes bank issuers.
LGIM said the banking sector dominates global corporate bond issuance, which limits diversification in many bond indices. XBNG excludes banks to reduce concentration risk, offering investors broader sector exposure.
Aanand Venkatramanan (pictured), head of ETFs EMEA at LGIM, said: “Investors have long recognised the issue of bank issuer concentration in market-cap weighted corporate bond indices.
“We are excited to introduce this first of its kind ETF to the market which enables investors to benefit from the yield opportunity short-duration corporate bonds provide, with the added overlay of true diversification given the exclusion of bank issuers.”
Elsewhere, LGIM launched a multi-factor commodity ETF that excludes agriculture and livestock, with the strategy more closely aligned with ethically-minded investors.
