Key Highlights

  • UBS BBG MSCI US Liquid Corp Sustainable UCITS ETF (LSE:0HD9) is a Swiss franc hedged line of an ESG-screened US Credit fund.
  • Total fund Assets are approximately $1.5 billion across share classes.
  • Indicative Yield to Maturity is around 5.5% in US dollar terms before hedging.
  • Hedged NAV total return is lower than the US dollar line because of the wide US-Swiss rate gap.
  • Hedging costs are a central consideration for this share class.

Fund Overview

UBS BBG MSCI US Liquid Corp Sustainable UCITS ETF (LSE:0HD9) gives investors who measure returns in Swiss francs a way to own sustainable US Investment grade corporate bonds without dollar exposure. The Share Class has drawn attention because the Interest Rate gap between the US and Switzerland makes hedging expensive.

Fund Snapshot

  • AUM: approximately $1.5 billion across share classes.
  • Approx NAV total return: low single digits in CHF hedged terms over one year.
  • Indicative yield: about 5.5% in US dollars before hedging costs.
  • Ongoing charge: around 0.20%.
  • Benchmark: Bloomberg MSCI US Liquid Corporate Sustainable Index, hedged to CHF.
  • Distribution: distributing class.

Fund Objective, Focus and Portfolio Composition

The fund tracks a version of the Bloomberg US Liquid Corporates index that applies MSCI ESG ratings and exclusions. Issuers with low ESG ratings or involvement in controversial Business areas are removed, while the Liquidity screen keeps the portfolio focused on actively traded bonds.

Holdings number more than 1,000 bonds. Financials are the largest sector, followed by technology, healthcare, consumer non-cyclicals and communications, with energy underweight relative to the broad market. Credit quality is mostly A and BBB, with duration near 6.5 to 7 years. Geography is predominantly US issuers. The CHF hedging programme uses rolling currency forwards, whose cost reflects the gap between US and Swiss short-term interest rates.

Market Backdrop and Latest Trends

US investment grade corporate bonds have spent 2026 caught between strong Demand for yield and a sharp repricing of US interest rates. The Federal Reserve kept its target range at 3.75%-4.00% in October, and after US employers added 165,000 jobs in the latest payrolls report, markets moved to price a high probability of a December rate increase. The 10-year Treasury Yield touched about 5.35% during the autumn sell-off before settling back near 5%. The conflict in the Middle East, now in its ninth month, pushed Brent Crude above $126 at its peak and revived Inflation fears worldwide, before oil fell more than 10% in a matter of days after the US midterm elections.

For UBS (Lux) Fund Solutions - UBS BBG MSCI US Liquid Corp Sustainable UCITS ETF (hedged to CHF) (LSE:0HD9), higher Treasury yields have been the dominant driver of returns, because investment grade spreads have stayed relatively tight by historical standards. Corporate balance sheets in the US remain broadly healthy, but bond investors have become more selective. Record Debt issuance by large technology companies funding data centres and artificial intelligence infrastructure has been a recurring theme across financial media, with several strategists warning that heavy Supply from a small group of hyperscalers could widen spreads in the technology and utilities sectors.

The upside of the sell-off is income. All-in yields on US investment grade credit are now close to the highest levels in more than fifteen years, which has drawn steady buying from insurers, pension funds and income-focused ETF investors. Social Media discussion among retail investors has shifted from chasing Equity momentum toward locking in yields on high quality bonds.

Fourth-quarter Earnings have so far shown that most investment grade issuers retain solid interest coverage, even after two years of higher borrowing costs. Strategists at major banks expect total returns over the next year to be driven mainly by coupon income, with the potential for price gains if US inflation cools and the Fed signals that its tightening is complete. For international investors, the choice between unhedged and hedged share classes has also become more important, as the dollar has firmed on rate-hike bets.

What Investors Can Watch Going Forward

Several signals are likely to shape the next leg of performance for UBS (Lux) Fund Solutions - UBS BBG MSCI US Liquid Corp Sustainable UCITS ETF (hedged to CHF) (LSE:0HD9):

  • The Fed's December meeting and US inflation data, since a rate hike would push yields higher in the short term.
  • Investment grade new issuance, especially large deals from technology and Utility companies funding AI infrastructure.
  • Credit spreads in banks, energy and consumer sectors, which react quickly to growth worries.
  • The 10-year and 30-year Treasury yields, which set the base yield for the portfolio.
  • Corporate earnings and guidance in the fourth-quarter reporting season.
  • Hedging costs for investors using a sterling, euro or Swiss franc hedged line, which change with interest rate differentials.

Key Risks to Consider

The key risks are interest rate risk, credit spread risk, concentration in financials and large issuers, and the possibility of downgrades from BBB to high yield. Investors in unhedged lines also take on US dollar Exchange Rate risk, while hedged lines carry hedging costs or gains that depend on the interest rate gap between currencies.

Bottom Line

UBS (Lux) Fund Solutions - UBS BBG MSCI US Liquid Corp Sustainable UCITS ETF (hedged to CHF) (LSE:0HD9) offers access to some of the highest investment grade yields in more than a decade. The fund’s near-term direction depends on the Fed and Treasury supply, but for long-term income investors, today’s yields provide a meaningful buffer against further rate moves.