THEAM, a subsidiary of BNP Paribas, has launched three new fixed income ETFs on Euronext Paris, providing exposure to portfolios of Eurozone inflation-linked government bonds, US Treasuries from across the yield curve, and euro-denominated investment grade corporate bonds. Each ETF follows a physical replication strategy.

Isabelle Bourcier, Head of Index Operations and ETFs at THEAM.

The BNP Paribas Easy Barclays Euro Government Inflation Linked All Maturities UCITS ETF (GOMA) tracks the performance of inflation-linked government bonds issued by Eurozone countries. The fund, which is denominated in euros, tracks the Barclays Euro Government Inflation Linked All Maturities Index, which is rebalanced on a monthly basis.

The BNP Paribas Easy Barclays US Treasury UCITS ETF (USTY) offers exposure to a portfolio of fixed rate US Treasury bonds diversified across the entire yield curve. The underlying Barclays US Treasury Index, which has existed since 1973, is denominated in US dollars and excludes US Treasury bills and STRIPS. The fund trades in US dollars.

The BNP Paribas Easy Markit iBoxx EUR Liquid Corporates UCITS ETF (ELQC) provides exposure to 40 of the most liquid investment grade corporate bonds denominated in euros. The underlying Markit iBoxx EUR Liquid Corporates Index has historically had approximately 75% exposure to issuers domiciled in the Eurozone while approximately 40% of the index’s exposure is dedicated to bonds from companies in the financial sector. The composition of the index is reviewed and rebalanced quarterly.

Each fund has a total expense ratio of 0.20%.

Isabelle Bourcier, Head of Index Operations and ETFs at THEAM, notes the listing of these ETFs is a concrete expression of THEAM’s desire to diversify the firm’s current product offering.

The ETFs complement BNP Paribas’ existing BNP Paribas Easy Markets iBoxx Euro Liquid Sovereigns ETF, which replicates the iBoxx Euro Liquid Sovereign Global Net Total Index, and has a TER of 0.15%. Collectively, these four ‘core’ ETFs are designed to provide the foundational building blocks for the fixed income segment of investors’ portfolios.

The BNP Paribas ETF suite is organized around three main categories of ETFs: portfolio ETFs (which replicate broad market indices), thematic ETFs (low carbon, listed real estate, SRI) and smart beta ETFs (low volatility, quality, value and momentum).

THEAM’s ETF activity grew strongly in 2016, recording nearly 20% growth in assets under management, representing a net inflow of approximately €950m.