Alternative Investments/ESG: Tabula Unveils ESG-Focused, “Fallen Angels” Bond ETF

The new ETF from Tabula is a groundbreaking fund that allows investors to access “fallen angel” (downgraded) bonds while aligning with the climate objectives outlined in the Paris Agreement.

Tabula Investment Management, a European ETF provider, has introduced the Paris-aligned Global High Yield Fallen Angels Climate UCITS ETF, which focuses on fallen angel bonds. These bonds have been downgraded from investment grade but offer a higher credit quality compared to typical high-yield bonds, according to Tabula CEO Michael John Lyttle. He noted that many fallen angels enter the high yield universe with a BB rating and tend not to slip below that level.

Lyttle observes that fallen angels present the potential to return to investment grade over time, with a lower default rate compared to broader high yield exposure. The long-term average global default rate for BB-rated bonds, as measured by S&P, stands at 0.59%, significantly lower than the 25.7% default rate for CCC-rated bonds and below. (ESG CLARITY)

Jason Smith, Tabula’s CIO, pointed out that fallen angels have lower default risk and the possibility of upgrades. These bonds are typically issued by large, well-established companies with business models and financing strategies based on investment grade borrowing rates. Therefore, management teams have strong incentives to address the issues that led to the downgrade, creating the potential for price appreciation when the bonds rebound.

This new ETF from Tabula has attracted $50 million in assets, seeded by a prominent Nordic institution. The launch reinforces Tabula’s commitment to environmental, social, and governance (ESG) goals, as 80% of its ETF assets under management are now allocated to SFDR Article 8 and 9 funds.

The Tabula Global High Yield Fallen Angels Paris-aligned Climate UCITS ETF (THFA) is listed on the London Stock Exchange with a total expense ratio (TER) of 0.50%.

Related Story:  A New UBS ETF Gives Exposure To Dividend-Paying Swiss Companies With High ESG Scores

Image by Łukasz Winiarski from Pixabay

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Latest Alternative Investment News
Digital Assets: 1% Of Chileans Sign Up For Worldcoin; Rush Seen In Argentina, Too
September 28, 2023     Digital Assets, News

Worldcoin, the innovative biometric wallet and ID project, is making significant waves in Chile as it surpasses a remarkable milestone. The organization has reported that over 200,000 Chileans have embraced…
FinTech: Atom Bank And Kamma To Partner For Greening UK Mortgage Assets
September 28, 2023     ESG and Sustainability, FinTech, News, Real Estate

Atom bank and Kamma have formed a significant partnership aimed at addressing the pressing concerns of climate change. This collaboration brings together Atom bank’s cutting-edge banking technology with Kamma’s climate…
Venture Capital: Slope, A B2B Solutions Provider Backed By Sam Altman, Scores $30M Funding

Slope, a two-year-old AI startup based in San Francisco, has secured a substantial $30 million equity round led by Union Square Ventures and featuring participation from OpenAI’s CEO, Sam Altman….
Artificial Intelligence: Palantir Awarded $250M Contract By US Department Of Defense For AI R&D
September 28, 2023     Artificial Intelligence, Latest News, News

Palantir Technologies Inc. (NYSE: PLTR) has secured a significant contract worth $250 million with the US Defense Department. The primary focus of this contract is the research and development of…