Amundi has launched an ETF offering exposure to the expected consumer price inflation for the next 10 years in the US.
The Amundi Index Breakeven Inflation USD 10Y UCITS ETF (BINFU) is listed on Euronext Paris in USD and Euronext Amsterdam in EUR with an ongoing charge figure (OCF) of 0.16%.
BINFU replicates the Markit iBoxx USD 10-Year Breakeven Inflation (futures) index, offering exposure to the US 10-year breakeven inflation.
It calculates the breakeven inflation by estimating the yield spread which is taking long positions in US treasury inflation-protected securities (TIPS) and a short position in treasury note futures contract with 10-year maturities.
Amundi says the launch follows client demand for a long-term investment product offering exposure to an inflation asset class without exposure to real interest rate movements.
Nicolas Fragneau (pictured), head of ETF product specialist at Amundi, said: “Looking at the market conditions, we believe that the US inflation is in a positive spot mainly due to the base effect on oil prices.
“We also observe other supportive effects: The Federal Reserve's intervention and its decision to ease its monetary policy in a 'preventive' manner through a further reduction in its key rate should boost demand and thus increase inflation.”