TrueShares Structured Outcome August ETF (AUGZ US) - Investment Proposition

Group 1 - Investment-grade (IG) credit was favored by investors in 2020 due to wider spreads to government bonds and central bank support, making it an attractive investment choice [3] - By the end of 2020, positive sentiment towards IG credit diminished as rising US Treasury yields and the cessation of the Federal Reserve's buying program led to negative returns and net selling in Q1 2021 [4] - Despite risks from inflation, the spread compression between US Treasuries and German Bunds indicates a shift by investors towards higher-yielding US assets [5] Group 2 - Treasury yields have stabilized, prompting investors to reassess their positions in IG credit, which now offers yields above 2%, appealing particularly to EUR-based investors [6] - The cost of hedging against currency risks is historically low, making US credit investments more favorable for EUR-based investors, with spreads close to 100 basis points being the most advantageous since early 2017 [6] - Recent announcements on carbon emissions by the UK and US governments are expected to heighten focus on climate and ESG themes, influencing investment strategies in US IG credit [11] Group 3 - The SPDR Bloomberg SASB US Corporate ESG UCITS ETF provides exposure to investment-grade, fixed-rate, US dollar-denominated corporate bonds while excluding controversial industries [9] - The index is optimized to maximize ESG exposure while aligning sector weights closely with the Bloomberg Barclays US Corporate Index, minimizing tracking error for investors transitioning to ESG-compliant funds [13] - The trend of European investors moving towards ESG-based investment strategies in US credit highlights the growing importance of ESG considerations in investment decisions [11]