Industry Updates

Tabula halves fee on euro high yield climate ETF

To compete with BlackRock's recent ETF launch

Tom Eckett

Michael John Lytle

Tabula Investment Management has slashed the fee on its euro-denominated high yield Paris-aligned climate ETF amid competition from BlackRock.

The fee on the Tabula EUR HY Bond Paris-Aligned Climate UCITS ETF (THEP) has halved from 0.50% to 0.25%.

The move comes just a month after BlackRock unveiled an equivalent strategy, the iShares € High Yield Corp Bond ESG Paris-Aligned Climate UCITS ETF (HYPE), on 7 December.

HYPE, which also carries a total expense ratio (TER) of 0.25%, already has €241m assets under management (AUM) versus €58m AUM for THEP.

It highlights the challenge of being a smaller player in the European ETF market when up competing against the likes of BlackRock which have larger distribution networks.

THEP tracks the iBoxx MSCI ESG EUR High Yield Paris Aligned Capped index which offers exposure to euro-denominated high yield bonds that score well on climate and ESG metrics.

To meet the criteria of the Paris-Aligned Benchmark (PAB), the index targets 50% lower greenhouse gas (GHG) emissions versus the parent benchmark and an annual GHG emissions reduction of 7% a year.

Michael John Lytle, CEO of Tabula, commented: “Investors continue to seek Article 9 Paris-aligned solutions for their core portfolio positions.

“To support further potential inflows into the ETF, we have cut its fee by half to 0.25%.”

In June, Global X reduced the fee on its copper miners ETF, the Global X Copper Miners UCITS ETF (COPX), from 0.65% to 0.55% a week after BlackRock launched a similar strategy.

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