WisdomTree ETF issued on Deutsche Börse and Borsa Italiana tracks CoCo bonds of European financial institutions

The new bond ETF issued on Deutsche Börse and Borsa Italiana, the WisdomTree AT1 CoCo Bond UCITS ETF – EUR Hedged, gives investors the opportunity to participate in the performance of CoCo bonds denominated in euros, US dollars or pounds sterling (conditional mandatory convertible bonds) issued by European financial institutions. It seeks to replicate the performance of the iBoxx Contingent Convertible Liquid Developed Europe AT1 Index (EUR Hedged).

CoCo bonds, abbreviation for 'Contingent Convertible Bonds', are long-term, subordinated bonds, usually with a fixed coupon, which are converted from debt into equity upon the occurrence of events specified in the bond terms. Bond holders then become liable shareholders.

The ETF uses a hedging strategy to minimise the exchange rate risk between the base currency of the index components and the euro.