Smart move by Lombard Odier/ETF Securities

Smart move by Lombard Odier/ETF Securities

Lombard Odier Investment Managers and ETF Securities have launched three Ucits-compliant fundamentally weighted fixed income ETFs on the London Stock Exchange.

Lombard Odier IM, a specialist in smart beta fixed income investing, had previously made its fundamental fixed-income strategies only available to mutual fund investors.

The new indices are created on a rules-based analysis of a country’s or company’s fundamentals to create an index that gives investors an efficient exposure to fixed income.

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Key Features:

The three ETFs will be available through wealth managers, financial advisers and investment platforms

The three funds are called: ETFS Lombard Odier IM Euro Corporate Bond Fundamental; ETFS Lombard Odier IM Global Corporate Bond Fundamental; and ETFS Lombard Odier IM Global Government Bond Fundamental

The ETFs are available in sterling, euro and US dollar denominations

Isa and Sipp eligible

Adviser view:

Scott Taylor of London-based Brilliance Financial Planning, said: “I am not particularly fond of the term ‘smart beta’ – it is jargon – but I am generally in favour of the development of fundamental indices, whether for ETFs or general Indices. We are all aware of the difficulties for investors in traditional market-cap-weighted indices.

“However, fundamentally weighted indices and ETFs could end up to be a little more expensive for investors, and there are not many readily accepted fundamental indices around. I would like to see better availability of such indices, certainly ones with equal weighting, but once you start getting too sophisticated about the index, then it might not be more expensive and it could be more expensive for some retail investors.”

Find out More: Keep watching to see an upcoming video interview with Lombard Odier talking about smart beta ETFs.