Eurizon SLJ Capital launches active EM Bond ETF on LSE

The launch is supported by Citi for ETF Services and Carne Global Fund Managers for Management Company Services.

Eurizon SLJ Capital, the London-based investment manager of Eurizon, the €384 billion (AUM as of 31 March 2024) asset management company of the Italian bank Intesa Sanpaolo, announces the launch of its first Irish-domiciled actively managed ETF with Connect ETFs, a new ETF platform connecting asset managers with leading ETF service providers. The platform uses Carne Global Fund Managers (Ireland) Limited (“Carne”) as Management Company and Citi as administrator, custodian, and depositary.

The new actively managed ETF, the CO Eurizon SLJ EM Bond Strategic Income UCITS ETF ($102m AUM as of 17 July 2024), which has no benchmark, aims to provide emerging market income with developed market risk characteristics through a quality-enhanced investment process. It is managed by Eurizon SLJ Capital’s London-based team led by Stephen Jen (CEO & co-CIO) and Fatih Yilmaz (co-CIO). Eurizon SLJ Capital has a long-standing reputation for orthogonal thinking and a research-led approach to emerging market investing. The fund is listed on the Irish Stock Exchange and is expected to launch on the London Stock Exchange in late 2024.

“Our quality-enhanced active EM bond ETF offers investors a transparent, cost-effective, and flexible access to EM bond income with developed market risk characteristics, managed by a diverse team and backed by our research-led approach to investing. It is an exciting time for active ETFs in Europe, and we see growing demand for high-conviction bond ETFs, either as a complement to passive funds or an outright allocation,” said Matt Jones, Head of Distribution for Eurizon SLJ Capital. “The Connect ETFs platform is the ideal solution for our entrance into the active ETF market. Their expertise from product design to distribution is very attractive and enables us to focus on creating value for investors.”

Connect ETFs Platform

The Connect ETFs platform enables investment managers to bring their investment strategies to market as a UCITS ETF efficiently and cost-effectively. This allows investment managers to focus on adding value to investors through portfolio management, whether active or passive, fundamental research-driven or quantitative/AI-based. Connect ETFs’ integrated platform offers a comprehensive suite of services essential for the successful launch, management, and distribution of European ETFs.

“Connect ETFs is focused on delivering client-focused success and assets for our clients. Eurizon SLJ Capital has trusted Connect with their first ETF and that is our ultimate accolade. Connect ETFs understand clients have a choice and any success Connect achieve is our clients’ success.” said Danny Dolan, a Director of Connect ETFs ICAV.

Management Company Services by Carne

As Europe’s leading third-party management company, Carne plays a crucial role in the new fund’s operational efficiency and regulatory compliance.

“We’re delighted to be collaborating with Eurizon SLJ Capital and Connect ETFs to support the launch and operation of this new fund with a tailored suite of management company services encompassing risk, governance, oversight, and compliance,” said Patrick O’Brien, Head of Business Development at Carne. “As the European market for active ETFs grows at pace, asset managers are increasingly collaborating with third-party specialists to unlock faster, more cost-effective routes to market, while offering investors access to new opportunities through cost-efficient, risk-optimised investment solutions. Our partnership with Connect ETFs is testament to this and to our broader pursuit of driving innovation and excellence in fund management.”

Administration, Custodian and Depository Services by Citi

Citi is the new ETF’s administrator, custodian, and depositary as well as provider of various ETF-specific services like portfolio composition file production and supporting the primary market transaction lifecycle, all managed through Citi’s proprietary ETF technology platform, ACES.

“With the underlying secular shift toward ETFs, we continue to grow our ETF business through close collaboration across the firm. This collaboration allows us to support the full spectrum of end-to-end needs for ETF issuers and investors across the entire ETF lifecycle,” said Gareth Myburgh, Head of ETF Services for Europe, Middle East and Africa, Securities Services, Citi. “We are proud to be part of this initiative, supporting Eurizon SLJ Capital and Connect ETFs through the provision of our next-generation, end-to-end ETF solution.”