UBS ETF (LU) Bloomberg Euro Inflation Linked 1-10 UCITS ETF (EUR) A-dis
| Issuer: UBS |
| Asset Class: Fixed Income |
| TER: 15bps |
| Trading Currency: GBX |
| Pays Income: False |
| Listing Date: 30 Jul 2025 |
| Ticker: EII1 |
| ISIN: LU1645380442 |
This fund provides exposure to inflation-linked government bonds issued by Eurozone countries. It tracks an index composed of fixed-rate, investment-grade securities with remaining maturities between one and ten years. The key feature of these bonds is that their principal value adjusts with changes in the Eurozone Harmonised Index of Consumer Prices (HICP), excluding tobacco. This mechanism is designed to protect investors' purchasing power during periods of rising inflation, as both the principal and subsequent coupon payments increase in line with inflation, aiming to provide a real rate of return.
The investment is suitable for individuals seeking to hedge their portfolios against inflation within the Eurozone. By holding bonds whose value is directly tied to a key inflation metric, investors can preserve the real value of their capital. It may appeal to those with a medium-term investment horizon, given the 1-10 year maturity range of the underlying bonds, which offers a balance between interest rate sensitivity and yield. The fund could serve as a core holding in a diversified fixed-income allocation, particularly for investors who are concerned about the erosive effects of rising prices on traditional nominal bond returns. It provides a straightforward and cost-effective method to gain this specific type of credit exposure.
The fund's focus on the 1-10 year maturity segment differentiates it from broader inflation-linked bond products, offering a targeted duration exposure that mitigates some of the price volatility associated with longer-dated bonds. By employing a full physical replication strategy, the fund holds the actual constituent bonds of the index, ensuring direct exposure and transparency for the investor. For those looking to safeguard their assets from Eurozone inflation while maintaining exposure to high-quality government debt, this product offers a compelling and specific solution.
