Amundi unveils Paris-Aligned corporate bond ETF

ETF rebranded from a Lyxor corporate bond strategy

Lauren Gibbons

Climate ESG

Amundi is extending its climate ETF range with the launch of a US-dollar Paris-Aligned Benchmark (PAB) corporate bond ETF.

The Amundi Corporate Bond PAB Net Zero Ambition UCITS ETF (USIC) listed on the London Stock Exchange and Borsa Italiana last month with a total expense ratio (TER) of 0.14%.

The French asset manager unveiled USIC after rebranding the Lyxor ESG USD Corporate Bond UCITS ETF (USIH) as it continues to overhaul its range.

Amundi made a similar move in December 2022 on its euro-denominated equivalent, the Amundi EUR Corporate Bond Climate Net Zero Ambition PAB UCITS ETF (CRP).

USIC tracks the Bloomberg MSCI Corporate PAB Green Tilted index, which offers exposure to investment grade, US-dollar denominated corporate bonds from developed market issuers with a minimum MSCI ESG rating of BB.

The index uses an optimisation strategy and aims to increase the weight of issuers that meet carbon reduction targets, increase the weight of green revenue versus fossil-fuel based revenue, and increase the weight of green bonds of the index.

It will align with the Paris Agreement which targets initial decarbonisation versus the core/equivalent benchmark of 50% and an additional decarbonisation target of 7%.

The index contains 5416 holdings with durations spanning between 0-1 year and 25-plus years.

Amundi’s ETF range has been in a state of flux since it acquired Lyxor as the French asset manager continues to streamline the two ranges.

Earlier this month, Amundi merged the Lyxor MSCI EM ESG Leaders Extra UCITS ETF (LESG) with the Amundi MSCI Emerging Markets SRI Climate Net Zero Ambition PAB UCITS ETF (EMSRI).

According to its full-year results for 2022, Amundi has turned 27% of its ETF range into ESG ETFs, over halfway to its 40% target by 2025.

It becomes the latest issuer to launch a PAB corporate bond ETF after Fidelity expanded its active multi-factor fixed income range last October.

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