Lyxor, Europe’s third largest provider of exchange-traded funds, has slashed the fees on a number of important UK and US bond ETFs, cutting total expense ratios (TERs) by as much as two-thirds in some cases. Through the firm’s ETFs, investors can now obtain exposure to gilts and Treasuries from as little as 0.07% and UK and US corporate bonds from 0.09%.

Chanchal Samadder, Head of UK and Ireland ETF Sales for Lyxor.

In the current low-yield environment where, for example, two-year gilts yield less than 0.50%, the fee reductions materially enhance the value proposition for investors seeking access to these staple portfolio holdings, improving the net-of-fees performance investors receive.

The move, which firmly establishes Lyxor as a price leader in fixed income ETFs, comes at a time when fixed income ETF inflows are accelerating and ETFs are increasingly being seen as the vehicle of choice for gaining access to the asset class.

Last year, fixed income ETFs in Europe grabbed an outsized share of European ETF inflows with more than 35% of the total versus their market share of approximately 25%.

Chanchal Samadder, Head of UK and Ireland ETF Sales for Lyxor, commented: “We wanted to create a range of core fixed income exposures that are safe, liquid and low cost. These are staple, safe haven exposures in most portfolios and we wanted to give investors a better deal”.

The ETFs are all linked to Markit iBoxx indices:

Lyxor iBoxx £ Gilts (DR) UCITS ETF
Old TER: 0.18% New TER: 0.07%

Lyxor iBoxx £ Gilt Inflation Linked (DR) UCITS ETF
Old TER: 0.22% New TER: 0.07%

Lyxor iBoxx $ Treasuries 1-3Y (DR) UCITS ETF
Old TER: 0.165% New TER: 0.07%

Lyxor iBoxx $ Treasuries 5-7Y (DR) UCITS ETF
Old TER: 0.165% New TER: 0.07%

Lyxor iBoxx $ Treasuries 10Y+ (DR) UCITS ETF
Old TER: 0.165% New TER: 0.07%

Lyxor iBoxx £ Liquid Corporates Long Dated UCITS ETF
Old TER: 0.15% New TER: 0.09%

Lyxor USD Liquid Investment Grade Corporate Bonds UCITS ETF
Old TER: 0.15% New TER: 0.09%