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Monthly update - August 2020


Tabula European IG Bond ETF reaches over €100m

The Tabula iTraxx IG Bond UCITS ETF (TTRX) exceeded €100m in AuM last month as investors sought liquid European corporate bond exposure. With a focus on the larger, more liquid issues, 80% of TTRX’s bonds are eligible for purchase under the ECB’s Pandemic Emergency Purchase Programme, compared to just 54% for broad Euro corporate bond indices.

TTRX tracks a bond index designed to closely match iTraxx Europe, the acknowledged benchmark for European credit. The fund invests only in Euro corporate bonds from European issuers, avoiding the high exposure to US typical of broad Euro corporate bond ETFs. And by holding bonds from a tight range of maturities, TTRX gives consistent average duration of around 5 years.

  TTRX vs Eur Bond ETF Final
Data: Bloomberg and Tabula, as at 31 July 2020.


US corporate downgrades hit new high in Q2 2020

Our latest ETF, the Tabula North American CDS High Yield Short ETF (TABS) allows investors to take short exposure to North American high yield credit, providing an effective hedge without the need to become a forced seller.

S&P report that US corporate downgrades reached a record high of 414 in Q2 2020, as the sudden stop US recession deepened.

Meanwhile, the ratings agency recorded a near tripling in the number of US corporate defaults, rising to 60 from 21 in the first quarter. The 81 defaults in the first half of 2020 outnumber 2019’s full-year total of 77.

With a growing number of downgrades and a rising proportion of issuers with a negative credit bias,* S&P forecast that the US trailing 12-month speculative-grade corporate default rate will continue to climb, reaching 12.5% in March 2021 (compared to just 3.5% in March 2020).

US corporate defaultsData: S&P Credit Research, as at 30 June 2020. * The percentage of issuer credit ratings with negative outlooks or on CreditWatch with negative implications.


Tabula insights: What investors really want from ESG

We asked 120 European professional investors* for their views on fixed income ESG ETFs. We found that, overwhelmingly, they want more innovation. Our survey also revealed an interesting preference for outperformance potential over benchmark tracking.

* Based on 120 professional investors surveyed in May/June 2020 by Tabula Investment management (“Tabula”) or independent research company Pureprofile. Tabula commissioned Pureprofile to interview professional investors across seven European countries.



How did our ETFs perform in July?

  Tabula iTraxx IG Bond (EUR) Dist1 +1.3% See the factsheet >  
  Tabula European Performance Credit (EUR) Acc +1.1% See the factsheet >  
  Tabula European iTraxx Crossover Credit  (EUR) Acc +0.5% See the factsheet >  
  Tabula European iTraxx Crossover Credit Short (EUR) Acc -0.8% See the factsheet >  
  Tabula North American CDX High Yield Credit Short (USD) Acc2 -2.7% See the factsheet >  
Tabula J.P. Morgan Global Credit Volatility Premium (EUR) Acc
+4.2% See the factsheet >  
1 Performance represents the iBoxx iTraxx Europe Bond Index. 2 Performance represents the CDX North American High Yield Credit Short Index.
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