Invesco launches the lowest cost US Treasury Bond ETFs in Europe

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Invesco is launching the lowest cost US Treasury Bond ETFs in Europe. The firm is offering investors a choice of funds that focus on US government bonds with maturities of either 1-3 years, 3-7 years, 7-10 years or broad exposure across the full maturity spectrum. The four funds will be available to trade in USD or GBP on the London Stock Exchange and have ongoing charges of 0.06% per annum. A GBP-hedged version of the Invesco US Treasury Bond 7-10 Year UCITS ETF is also available on the LSE with an ongoing charge of 0.10% per annum.

Paul Syms, Head of EMEA ETF Fixed Income Product Management at Invesco, said, “Whether an investor is cautious or has a more moderate risk appetite, US Treasury bonds are likely to play a significant role in their portfolio. These highly rated bonds are often valued for their ‘safe haven’ status and could be increasingly attractive for any investor who is concerned about recession or market volatility.”

ETF name Invesco US Treasury Bond 1-3 Year UCITS ETF Invesco US Treasury Bond 3-7 Year UCITS ETF Invesco US Treasury Bond 7-10 Year UCITS ETF Invesco US Treasury Bond UCITS ETF
Bloomberg code TRE3 TRE7   TREX   TRES  
Trading currency USD and GPB[1]  
Distribution Quarterly Quarterly Quarterly Quarterly
Yield[2] 2.52% 2.52% 2.66% 2.61%
Exchange[3] LSE LSE LSE LSE
Ongoing charge 0.06% 0.06% 0.06% 0.06%
   

 

US Treasuries offer some of the highest government bond yields available in the G7 group of developed economies. The yield on the benchmark 10-year US Treasury Bond index has more than doubled from the lows seen in mid-2016 as monetary policy has been tightened. However, the Federal Reserve is now projecting just two further interest rate hikes during 2019, down from its previous forecast of three[4].

Each of the new Invesco ETFs will be invested physically in the constituents of the relevant Bloomberg Barclays US Treasury Index. These indices comprise USD-denominated, fixed-rate, nominal debt issued by the US Treasury.

Invesco already has some of the lowest cost ETFs in Europe for core equity and commodity benchmarks and is now building out its core fixed income range. The new US Treasury Bond ETFs follow recent launches of funds providing simple, low-cost exposure to corporate bonds and floating rate notes. This “portfolio fund” range of ETFs complement the firm’s more innovative solutions, providing investors with greater choice and flexibility with which to construct their portfolios.