Lyxor has launched three new ETFs built to provide a more sustainable exposure to High Yield bonds. The three ETFs – covering USD High Yield, EUR High Yield, and Global High Yield – use Bloomberg Barclays MSCI Sustainable SRI indices, which apply sustainability filters to the bond universe to reduce exposure to controversial and low-ESG-rated issuers.
The indices apply a rigorous ESG standard to High Yield bond issuers: a minimum MSCI ESG rating of BBB is required to be included in the index. MSCI’s ESG ratings methodology filters out issuers with low ESG scores and/or who are materially involved in controversial industries.
The USD High Yield and the Global High Yield ETFs were listed in USD on London Stock Exchange on the 13th of February 2020. The whole range will be listed in EUR on Borsa Italiana on the 25th of February 2020. With a TER (Total Expense Ratio) of 0.25%, these are the lowest-cost ETFs tracking High Yield indices with ESG filters*.
Lyxor’s latest High Yield ETF launches follow a 2019 decision to move the bulk of its Investment Grade bond ETFs to the Bloomberg Barclays MSCI Sustainable SRI indices using the same ESG rating methodology.
Philippe Baché, Head of Fixed Income at Lyxor ETF, comments: “ESG rating in High Yield is one of the latest innovations in fixed income indexing. We are always looking for ways to provide investors with even more innovative tools to achieve their sustainable goals. By applying an ESG lens to the High Yield bond universe, we are able to provide a significant move away from parent indices offering a potentially more conservative risk profile.”
Find out more about our new range:
Lyxor USD High Yield Sustainable Exposure UCITS ETF
Lyxor Global High Yield Sustainable Exposure UCITS ETF
Lyxor Euro High Yield Sustainable Exposure UCITS ETF (listing 25th Feb 2020)
*Source: Lyxor International Asset Management, as at 12/02/2020. Statements about Lyxor credentials vs. peers refer to the European UCITS ETF market only.
