Industry Updates

Tabula adds unlisted share class to Paris-aligned ultrashort bond ETF

This is the firm's first non-exchange-traded share class

Tom Eckett

Michael John Lytle

Tabula Investment Management has launched an unlisted share class on its Paris-aligned euro-denominated investment grade ultrashort bond ETF.

The firm will offer two sterling-hedged share classes of the Tabula EUR Ultrashort IG Bond Paris-Aligned Climate UCITS ETF (TUCP) which launched in October.

The first is an ETF listed on the London Stock Exchange and the second is the fixed income ETF issuer’s first non-exchange-traded share class.

Michael John Lytle, CEO of Tabula, commented: “The non-exchange traded share class brings many of the traditional benefits of ETF investing, but makes it available to those without the tools to trade ETFs.”

Tabula joins HSBC Asset Management which became the first asset manager to launch both listed and unlisted share classes within the same Irish-domiciled fund structure.

In August, PIMCO also announced plans to introduce the ability to implement non-ETF share classes on its range of fixed income ETFs.

Under guidance from the European Securities and Markets Authority (ESMA), fund structures domiciled in Ireland are required to have ‘UCITS ETF’ in the name if they offer an ETF share class alongside its mutual fund share classes.

HSBC AM was the first to take advantage of the structure despite the Central Bank of Ireland (CBI) rule change occurring in 2018.

However, the Commission de Surveillance du Secteur Financier’s (CSSF) interpretation of ESMA’s guidelines means Luxembourg-domiciled funds do not have the same labelling requirements and can have an ETF share class without having to rename the entire fund as ‘UCITS ETF’.

Tabula’s TUCP tracks the Solactive ISS Paris Aligned Select 0-1 Year Euro Corporate IG index which offers exposure to euro-denominated corporate bonds that are aligned with the aims of the Paris Agreement.

As a result, the ETF aims for a 50% reduction in greenhouse gas emissions and an annual emissions reduction of 7% versus the parent benchmark.


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