Amundi ETF has launched a new fixed-income ETF on the London Stock Exchange, providing UK investors with a cost-effective route to European high-yield bonds while neutralising currency risk.
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By ETFWorld.co.uk
Benoit Sorel Global Head of ETF, Indexing & Smart Beta Amundi ETF
The Amundi Core EUR High Yield Bond UCITS ETF GBP Hedged Acc (ISIN: LU3206575048) commenced trading on 13 January 2026.
The fund is designed to replicate the performance of the iBoxx EUR Liquid High Yield Index, a benchmark composed of euro-denominated, sub-investment grade corporate bonds. Its defining feature is a built-in hedge that converts the fund’s returns from euros to British pounds, targeting a neutral currency impact for sterling-based investors.
Fund Mechanics and Objective
According to its official documentation, the ETF’s investment objective is to “track the performance of the iBoxx EUR Liquid High Yield Index” while aiming to “minimise the tracking error.” It employs a physical replication strategy, directly holding a representative selection of the index’s constituent bonds.
The fund has a total expense ratio (TER) of 0.17%. It follows an accumulation (Acc) distribution policy, meaning coupon payments from the bond holdings are automatically reinvested within the fund.
Portfolio Role and Key Considerations
This ETF is positioned for investors seeking the potentially higher income offered by the European high-yield corporate debt sector, but who wish to isolate that return from foreign exchange movements. By hedging the euro exposure, the fund’s performance is intended to reflect primarily the credit risk and interest rate movements of the underlying bonds, not the EUR/GBP exchange rate.
Investors should note the specific risks inherent to this strategy:
Credit Risk: High-yield (“junk”) bonds carry a higher risk of issuer default compared to investment-grade bonds.
Interest Rate Risk: Bond prices typically fall when interest rates rise.
Liquidity Risk: The underlying market may be less liquid, which can increase volatility.
The currency hedge itself involves operational costs and may not be perfectly effective at all times.
Context within the Amundi Range
This new fund complements Amundi’s existing suite of fixed-income ETFs. It offers a sterling-hedged counterpart to the firm’s established, and more expensive, unhedged European high-yield ETF, the Amundi ETF EUR High Yield Bond (ISIN: FR0010754202), which has a TER of 0.25%. For UK investors, the new launch provides a dedicated, lower-cost tool for accessing this asset class without a deliberate currency bet.
| Product Name | Amundi Core EUR High Yield Bond UCITS ETF GBP Hedged Acc |
| ISIN | LU3206575048 |
| SEDOL | BQ5JCT6 |
| Currency | GBP |
| Benchmark | iBoxx EUR Liquid High Yield GBP Hedged T |
| TER | 0.17% |
Source: ETFWorld.co.uk
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