Invesco cuts fees on two corporate bond ETFs

Invesco cuts fees

Invesco is taking the fee war to the corporate bond space after slashing charges on two ETFs.

The Invesco USD Corporate Bond UCITS ETF (PUIG) and the Invesco Euro Corporate Bond UCITS ETF (PSFE) has seen their fees cut by 6 basis points to 0.10%.

The two ETFs were launched in November 2017, however, have only raised $38m and $50m, respectively.

PUIG tracks the Bloomberg Barclays USD IG Corporate Liquidity Screened Bond index while PSFE offers investors exposure to the Bloomberg Barclays Euro Corporate index.

Paul Syms, head of EMEA ETF fixed income product management at Invesco, commented: “With more than a quarter of the global fixed income market currently with negative yields, investors need to consider carefully where it is worth taking on risk.

“This is especially relevant given that the duration of those negative-yielding securities has been increasing over the past year, making them more sensitive to changes in interest rates.

“Contrast this with investment grade corporate bonds, which we believe offer enough of a pick-up in yield over government bonds to make credit risk arguably more attractive for investors.”

Fixed income has been the asset class of choice for investors this year amid a more dovish central bank environment and concerns the record bull market in equities could be coming to an end.

According to data from Morningstar, fixed income ETFs saw a record $107bn inflows globally in the first six months of the year, the first time flows have crossed the $100bn mark in the asset class.

Invesco has also launched a number of ETFs in recent months. Last week, ETF Stream revealed the firm had launched a Kuwait ETF ahead of the country’s inclusion in the MSCI Emerging Markets index next year.

Meanwhile, in September, Invesco unveiled five euro government bond ETFs with a range of maturities for investors to gain exposure to.

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