Invesco has piled on the pressure with regard to the costs of ETFs in Europe with the launch of a range of the cheapest low-cost US Treasuries funds which feature ongoing charges of just six basis points (BIPS).
Investors can choose between maturities of either one-to-three, three-to-seven or seven-to-ten years for the funds which will all be listed on the London Stock Exchange.
Paul Syms, head of ETF fixed income product management for the EMEA region, said that whether an investor was cautious or had a moderate risk appetite, US Treasuries were sure to have a place in their portfolio.
“These highly rated bonds are often valued for their ‘safe haven’ status and could be increasingly attractive for any investor who is concerned about recession or market volatility,” he added.
Due to the current tightening of US interest rates in the past year or more, US Treasuries have some of the highest bond yields out of the G7 countries with the yield of the benchmark 10-year Treasury bond index now more than double the figure from mid-2016.
However, the latest comments from US Federal Reserve chief Jerome Powell would suggest the pace of rate hikes will necessarily slow with only two more upward revisions planned.
Invesco says the new launch cements the provider’s reputation as among those with the lowest charges across their range.
Invesco recently burnished its fixed-income credentials with the hiring of two new additions to its London office, Wayne Parker and Deepak Bharti. (Link to: https://www.etfstream.com/news/4531_invescos-two-new-fixed-income-hires-expands-etf-portfolio-management-team)
At the end of August this year, Invesco had roughly $10bn in fixed income ETF AUM in the EMEA market, and it said in September it was hoping to continue growing with the new additions to the team.