Schroders launches CoCo and USD investment grade corporate bond active ETFs

A year after its first fixed income UCITS active ETF landed in September 2025, Schroders has followed with two more: the Schroder CoCo Financial Credit Active UCITS ETF and the Schroder USD Investment Grade Corporate Bond Active UCITS ETF. The two funds carry the same asset floor and the same after-fees performance promise, but they part company on benchmark and on how narrow a slice of credit each is built to hold.

Tom Stephens, who runs ETFs at Schroders, called the additions the next stage of the firm's fixed income build-out and said they reinforce an ambition to run a broad active ETF platform spanning asset classes, with the emphasis on moving capabilities the firm already manages into an ETF wrapper where clients want them.

The CoCo fund takes the narrower slice, holding at least two-thirds of assets in contingent convertible bonds denominated in dollars, euros or sterling and issued by global financial institutions. Cindy Wang runs a bottom-up process built on the firm's in-house credit research, pointed at relative value across regions, financial sub-sectors and credit ratings, with the objective of income and capital growth in excess of the ICE BofAML Contingent Capital Index, hedged to dollars, after fees over three to five years.

The corporate bond fund runs wider, holding at least two-thirds of assets in dollar-denominated fixed and floating rate securities issued by companies worldwide, run by Julien Houdain, head of global fixed income, with Martin Coucke and Francois Carrie. The process estimates relative value across thousands of bonds using quantitative analysis, then layers on a risk model that assesses individual bonds rather than sector-wide groups before portfolio optimisation builds the diversified book; the target is income and capital growth in excess of the Bloomberg US Corporate Total Return Index after fees over the same three-to-five-year window.

That pairing of identical constraints and divergent benchmarks is the shape of a platform launch, one wrapper with several mandates inside it. Both funds sit at the paying end of the fee barbell: an ultra-cheap index core at one end and a minority of flow that pays up for active bond managers at the other. That makes the expense ratio the number most likely to decide how the pair is received.

The CoCo mandate is the more interesting bet, because bank contingent capital is a narrow slice of credit and issuers are mining narrow mandates as the broad shelf fills. Earlier in September Schroders was among the issuers chasing autocallable ETFs, so one month has now produced two Schroders products at the specialist end of the credit shelf. Fee, ticker, listing venue and launch date do not appear in the launch coverage, and the open question follows from the fund's own terms: whether a financials-only issuer base and that asset floor leave room for the CoCo fund to be bought as a building block in advisor portfolios or confined to a satellite holding.