UBS Asset Management (AM) has launched its first actively managed exchange-traded fund (ETF) and announced plans to offer a range of active ETFs.

The UBS EUR AAA CLO UCITS ETF aims to provide cost-efficient exposure to the highest rated tranches of the collateralised loan obligation (CLO) market and access to the active management capabilities of UBS AM’s Credit Investments Group (CIG).

The asset manager said AAA CLOs offer higher yield compared to similarly rated investments and that the floating rate nature of the asset class provided “significant” diversification potential in a broader fixed income portfolio.

“CLOs offer strong yield potential and diversification benefits,” said UBS AM head of client coverage, André Mueller.

“However, navigating this market requires an understanding of CLO structures, regulations and the risks involved in this sector.

“We have combined more than 20 years of ETF innovation with the expertise of our CIG, to provide most highly rated CLO securities efficiently and transparently. The active management element offers cost-efficient exposure with the potential to outperform.”

UBS AM head of the CIG, John Popp, added: “We are excited to offer our expertise in managing CLO tranches for over two decades to a wider investor base.

“Our team's deep credit knowledge and track record through multiple credit cycles make us well-positioned to provide compelling investments.

“In today's market, we believe AAA CLO liabilities offer an attractive risk-reward profile. Offering this investment through an ETF will expand access to this growing market.”

UBS AM also plans to launch a range of active ETFs, followed later by a series of income-focused ETFs with option overlays.

The UBS EUR AAA CLO UCITS ETF is registered for sale in the UK, Austria, Switzerland, Germany, Denmark, Spain, Finland, France, Ireland, Italy, Liechtenstein, Luxembourg, Netherlands, Norway, and Sweden.

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