ETFlab launched its first corporate bond ETF on Thursday with the listing of the ETFlab iBoxx € Liquid Corporates Diversified fund on Xetra.

The ETF tracks the iBoxx € liquid corporates diversified price index, which consists of a maximum 75 bonds and is a subset of the Markit iBoxx liquid index series.  The iBoxx € liquid corporates diversified index has a maximum weighting per issue of 7.5% and a maximum of two bonds per issuer in the index, said Thomas Pohlmann, head of marketing and product management at ETFlab.  The index is restricted to issuers domiciled in Europe, he added, thereby excluding euro-denominated bonds issued by companies from other geographical regions.

Confusingly, that means that three different subindices of the euro-denominated iBoxx liquid corporates bond index series are now tracked by European ETFs: the 40-bond iBoxx € liquid corporates index is used as the basis for the iShares Euro Corporate Bond ETF, the Lyxor ETF Euro Corporate Bond and the Amundi ETF Euro Corporates; the iBoxx € liquid corporates 100 index is used by the new db x-trackers ETF of the same name; and the iBoxx € liquid corporates diversified index underlies ETFlab’s new fund.

The new ETFlab fund uses full replication to track the index and will distribute its income. It has a management fee of 0.2% per annum, in line with most other funds in this category (Amundi’s is the cheapest, with an annual fee of 0.18%).

ETFlab now has €4.3 billion under management in a broad range of 33 equity and fixed income funds, according to the latest issue of Deutsche Bank’s ETF Liquidity Trends report.