WisdomTree to launch CoCos ETF on LSE

'Attractive yields'

WisdomTree is set to list a Contingent Convertible (CoCo) bond ETF on the London Stock Exchange on 17 May, offering investors exposure to the $170bn Additional Tier 1 (AT1) CoCo bond market in Europe.

The WisdomTree AT1 CoCo Bond UCITS ETF will track the Markit iBoxx Contingent Convertible Liquid Developed Europe AT1 index, which invests in CoCo bonds issued by financial institutions. With a total expense ratio (TER) of 0.5%, the ETF invests in CoCos only in European developed markets denominated in US dollars, euros or sterling and each issuer weighting is capped at 7.5%. CoCo bonds are a form of hybrid debt that is either converted into equity or is designed to absorb the issuer's capital losses when certain triggers occur, such as the issuer's liquidity falling below a specified...