Invesco has launched two actively-managed Ucits ETFs, giving professional investors access to the collateralised loan obligation (CLO) market.
The launch includes the Invesco USD AAA CLO Ucits ETF, Europe’s first Ucits ETF offering diversified exposure to USD AAA CLO notes, and the Invesco EUR AAA CLO Ucits ETF.
According to the company, the ETFs will comply with European Securitisation Regulation requirements, ensuring that originators or sponsors retain a minimum 5% net economic interest in the CLOs. They are designed to offer institutional investors consistent income and capital preservation by investing primarily in AAA-rated CLO tranches.
Stephanie Butcher, co-head of investment at Invesco, said: “Clients choose to partner with Invesco for the depth and breadth of our offering, from asset class and investment style to the choice of investment vehicle. We aim to deliver the best results for our clients by empowering highly experienced teams to focus on their key areas of expertise, and we can leverage this advantage by combining specialisms that further benefit clients.”
See also: Morningstar: Active ETF ‘fomo’ grows among managers
She added: “For instance, we have been combining our expertise in Private Credit and ETF construction successfully for 15 years in the US, and we expect the launch of this type of actively managed ETF to drive growth in Europe.”
The firm said the launch highlights the “growing appeal” of ETFs for those seeking exposure to new asset classes.
However, Michael Craig, Invesco’s head of European senior loans, said it was important to have an experienced manager when looking to gain exposure to this asset class. For this, he said, investors should look to those with experience.
He added: “With over 25 years of experience as both an investor and issuer of CLOs, we know that the quality of the CLO manager is key to performance through market cycles. Our active security selection, risk management process, and market presence add significant value. While we aim to deliver index-like performance, we’re not constrained and actively select each security we invest in based on its merit. We focus on CLOs from high-quality managers that we trust, as these tend to exhibit less volatility and better liquidity in stressed market conditions.”
