Tabula Investment Management has expanded its fixed income range with the launch of the world’s first Paris-aligned investment-grade ultrashort bond ETF.
The Tabula EUR Ultrashort IG Bond Paris-Aligned Climate UCITS ETF (TUCP) is listed on Deutsche Boerse with a total expense ratio (TER) of 0.15%.
TUCP will track the Solactive ISS Paris Aligned Select 0-1 Year Euro Corporate IG index which offers exposure to euro-denominated ultrashort corporate bonds that are aligned with the aims of the Paris Agreement.
Securities must have a maximum maturity of one year to be included in the index while each issuer has a maximum weighting of 5%.
In order to align with the EU’s Paris-aligned Benchmark (PAB), the ETF aims for a 50% reduction in greenhouse gas emissions and an annual emissions reduction of 7% versus the parent benchmark.
The ETF also integrates ESG criteria by excluding companies exposed to controversies such as alcohol, adult entertainment, gambling, controversial weapons, civilian firearms, nuclear power, GMO, nuclear weapons and cannabis.
It is classified as Article 9 under the Sustainable Finance Disclosure Regulation (SFDR).
TUCP currently has a yield of 4.3% with a duration of 0.4 years and an average credit rating of A.
Michale John Lytle (pictured), CEO of Tabula, said: “Tackling climate change is the defining issue of our age and a major risk to all investment portfolios.
“Meeting the goals of the Paris Agreement requires a multi-pronged approach. Investors must combine targeted allocations to specialist climate solutions with a shift of large asset pools into broad climate-friendly investments.”
Timo Pfeiffer, chief markets officer at Solactive, added: “Through our collaboration with Tabula, we are excited to offer investors increased opportunities to align their portfolios with the vital objectives of the Paris Agreement and drive greater capital allocation towards companies demonstrating clear support for the global transition to net-zero emissions.”
This is the firm's first launch since it unveiled a Paris-aligned global fallen angels ETF, the Tabula Global High Yield Fallen Angels Paris-aligned Climate UCITS ETF (THFA), in June.