Tabula launches short European high yield ETF

TER of 0.50%

Tom Eckett
clock • 1 min read

European fixed income ETF provider Tabula Investment Management has expanded its range with the launch of a short European high yield ETF.

The Tabula European iTraxx Crossover Credit Short UCITS ETF (TECS) is listed on the London Stock Exchange with a total expense ratio (TER) of 0.50%.

TECS tracks the iTraxx European Crossover Credit Short index, which offers investors exposure to 75 sub-investment grade securities. Rebalanced monthly, the new index was developed in partnership with IHS Markit.

TECS gives investors the ability to buy protection against widening high yield credit spreads through credit default swaps (CDS) by taking short (or inverse) positions in the European crossover index.

Michael John Lytle, CEO of Tabula, commented: "This is a cheaper way to create a high yield short position than borrowing an ETF, selling it into the market, paying a lending fee and then unwinding the transaction later in order to close the position.

"We strongly believe in making CDS indices more accessible. They were previously only available to a small group of specialised institutional investors.

"We are making them available in an ETF, which extends the tool kit for fixed income investors to efficiently manoeuvre in difficult market environments."

In January, the firm unveiled the Tabula European iTraxx Crossover Credit UCITS ETF, offering investors exposure to the European high yield market.

Last September, Investment Week revealed Tabula's first product since the launch of the firm in May to be the Tabula European Performance Credit UCITS ETF.

The firm plans to further expand its offering with new products across the fixed income spectrum, from investment grade and high yield credit to inflation, credit volatility, money markets and broader market exposure.