Lombard Odier Investment Managers, a pioneer in smart beta fixed income investing, and ETF Securities, one of the world’s leading, independent providers of Exchange Traded Products (“ETPs”), have listed their emerging market local government bond ETF on the London Stock Exchange.
This fourth addition to the range of fundamental, fixed income ETFs, is designed to provide exposure to local government currency debt of emerging markets and developing countries, using fundamental factors that assess issuers’ creditworthiness to identify those that we believe are best-placed to repay their debt.
Today, emerging sovereign bonds offer an appealing yield-to-maturity as interest rates in advanced economies are likely to remain low for longer. In addition, unlike market-cap benchmarks, which reward the most-indebted borrowers, our fundamental focused approach is designed to deliver quality-based diversification and includes exposure to India and China (the two largest emerging market countries).
Kevin Corrigan, Head of Fundamental Fixed Income, Lombard Odier IM commented:“We are extremely pleased to introduce our emerging market local government bond ETF to the European market. As interest rates in advanced economies remain depressed, relative valuation dynamics in emerging market debt are becoming interesting and our fundamentally weighted approach provides greater quality-focused diversification for investors. Lombard Odier IM has over five years of experience in fundamentally-weighted fixed income investing and our partnership with ETF Securities enables us to offer a wide range of investors an innovative approach to investing in emerging debt markets.”
Howie Li, Co-Head of CANVAS, ETF Securities added: “The suite of ETFs that we have brought to the market with Lombard Odier IM aim to capture the increasing shift towards more cost-effective investment solutions but, at the same time, provide an improved risk-adjusted return profile. Our first three products, launched in April, were well received and investors have already expressed their interest in the launch of this innovative emerging market ETF. With bond liquidity increasingly being a source of concern, investors in ETFs have extra liquidity support from the secondary market to help mitigate this. This liquidity support coupled with the ability to trade intraday makes the ETF vehicle an ideal access route into fixed income at a time when liquidity matters.”