Lombard Odier Investment Managers, a pioneer in smart beta fixed income investing, and ETF Securities, one of the world\u2019s leading innovators of exchange traded products, have partnered to offer a range of transparent, cost-effective and UCITS-compliant fundamentally-weighted fixed income ETFs. Until now,
\nLombard Odier IM\u2019s fundamental fixed income strategies were only available to mutual fund investors. Lombard Odier
\nIM and ETF Securities have now joined forces to offer smart beta bond opportunities to a wider base of investors
\nthrough wealth managers, financial advisers and investment platforms.<\/p>\n
The initial product listing on the London Stock Exchange, planned for mid-April, will see the launch of ETFs providing
\nfundamentally-weighted exposure to global government bonds, global corporate bonds and European corporate
\nbonds. An emerging market local bond ETF is scheduled to be launched in early May.<\/p>\n
The majority of fixed income investors are in strategies that follow a traditional market capitalisation approach. When
\ninvesting in equities this approach simply means that investors buy the biggest companies. However, in bond markets,
\nthis means lending more to the issuers with the most debt. At the heart of this fundamentally-weighted approach,
\ndeveloped by Lombard Odier IM, is the principle that bond investors are lenders. Therefore bond investing should start
\nwith a borrower\u2019s capacity to repay their debts rather than their capacity to borrow more. This approach assesses
\nfundamental factors for government and corporate issuers. For governments, the factors include gross domestic
\nproduct (\u201cGDP\u201d), debt-to-GDP along with fiscal and political stability. For corporate issuers, each sector\u2019s contribution
\nto the economy is looked at before assessing each individual issuer\u2019s revenues, level of indebtedness, cash flow and
\nasset quality. We believe this produces a more favourable balance between risk and return for investors.<\/p>\n
The new suite of ETFs can be used by both retail and institutional investors as simple, effective and low-cost portfolio
\nbuilding blocks, providing a core allocation to fixed income. The typical characteristics of index-based ETFs, namely
\ntheir intraday liquidity combined with the transparency afforded by the stringent regulatory standards required for
\nindices, meet the growing investor appetite for smart, low-cost, diversified fixed income investment solutions. These new ETFs aim to capture the increasing shift towards more cost-effective investment solutions but, at the same time,
\nare designed to provide an improved risk-adjusted return profile.<\/p>\n
Lombard Odier IM have over five-years of experience in fundamentally-weighted fixed income investing and were one
\nof the first to develop this approach and now publish the indices. ETF Securities provide the complementary expertise
\nand credentials in the field of ETF product strategy and infrastructure. They are pioneers in specialist investment
\nsolutions and developed the world\u2019s first gold exchange traded commodity in 2003.<\/p>\n
Mark Weeks, Chief Executive Officer, ETF Securities, said: Hubert Keller, Chief Executive Officer, Lombard Odier Investment Managers, added: Lombard Odier Investment Managers (\u201cLombard Odier IM\u201d), a pioneer in smart beta fixed income investing, and ETF
\n\u201cThis dynamic partnership is built on the complementary skills and expertise of two industry leaders and we are
\npleased to be joining forces with them. By delivering Lombard Odier IM\u2019s fundamental fixed income strategy via ETFs,
\nwe are offering an innovative smart beta solution to bond investing, further building on our reputation as a pioneer in
\nspecialist investment solutions. Extending our investor proposition has been at the centre of our strategy: adding fixed
\nincome solutions to our already strong franchise across commodities, currency, specialist equity and short &
\nleveraged ETPs is another milestone in delivering intelligent alternatives for investors.\u201d<\/em><\/p>\n
\n\u201cWe\u2019re pleased to be working with ETF Securities, a forerunner in ETP expertise. In fixed income markets, a traditional
\npassive approach lends money to the most indebted. If someone already owes you a lot of money, is it a good idea to
\nlend them more? We strive to offer bond investors greater diversification by lending based on issuers\u2019 ability to repay
\nrather than their ability to borrow. We use fundamental factors, based on the real economy, to determine the most
\nappropriate allocation.”<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"
\nSecurities, one of the world\u2019s leading innovators of exchange traded products (\u201cETPs\u201d), have partnered to offer a
\nrange of transparent, cost-effective and UCITS-compliant fundamentally-weighted fixed income ETFs.<\/p>\n","protected":false},"author":20,"featured_media":41898,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1471],"tags":[1655,1856,1718,1681,1651,1711,1437,1691,2234,2021,1952,1810,2118],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/41900"}],"collection":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/comments?post=41900"}],"version-history":[{"count":0,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/41900\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/41898"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=41900"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=41900"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=41900"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}