Industry Updates

Tabula to close debut ETF following low demand

The €5.4m ETF will cease trading on 14 March

Theo Andrew

a sign on a pole

Tabula Investment Management is set to close its European investment grade fixed income ETF, the first ever product launched by the issuer, due to low demand and assets under management (AUM).

The €5.4m Tabula European IG Performance Credit UCITS ETF (TCEP) will stop trading on the 10 March before closing entirely on 14 March.

Launched in September 2018, it was the debut product for the fixed income specialist which was founded earlier in the year by CEO Michael John Lytle, formerly one of the founding partners behind Source ETF. Since inception, the ETF has returned 11.5% after fees. 

In a market announcement, Tabula said: “The directors, in consultation with KBA Consulting Management Limited and Tabula Investment Management, have reviewed the ICAV’s sub-fund range and due to the size of the fund and low levels of investor demand, have resolved to close the fund in the best interests of shareholders.”

In April last year, Tabula changed the index on the flailing ETF in a bid to revive interest in the product which then had $14m AUM.

Since then, TCEP has tracked the iTraxx European IG Performance Credit Long index which offers exposure to 4x leveraged investment grade credit exposure while targeting minimal interest rate risk.

TCEP then sells protection on a credit default swap index which provides exposure to iTraxx Main 5Y index, a basket of 125 investment grade, equally-weighted securities.

The firm added it will be upping its focus on Article 8 and 9 funds under the Sustainable Finance Disclosure Regulation (SFDR), which currently covers over 55% of its $700m AUM, with more awaiting approval from the regulator. 

Commenting on the closure, Lytle said: "All ETF providers are constantly evaluating their product range, and as our business grows and matures, it is inevitable that some ETFs will be closed as many more are opened. The key for us is to keep bringing products to market that add value and fulfil the changing needs of our investors."

It is the second closure in a year for Tabula, which shuttered the Tabula J.P. Morgan Global Credit Volatility Premium Index UCITS ETF EUR (TVOU) in January 2021.

Earlier this month, the issuer expanded its fixed income range with the launch of Europe’s first euro high yield bond Paris-aligned climate ETF, the Tabula EUR HY Bond Paris-Aligned Climate UCITS ETF (THEP).

In January, Tabula appointed Mandy Chiu as head of product after she left State Street Global Advisors in December, responsible for building on the firm’s product growth over 2021 after it surpassed $650m AUM.

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