Lyxor unveils three innovative emerging markets ETFs

Feb 11th, 2014 | By | Category: Equities

Lyxor Asset Management, Europe’s third largest provider of exchange-traded funds, has further expanded its already comprehensive emerging markets product line-up with the launch of three innovative ETFs linked to MSCI indices.

Lyxor unveils three innovative emerging markets ETFs

Lyxor has unveiled three innovative emerging markets ETFs providing exposure to “beyond BRIC” countries.

Listed on the NYSE Euronext Paris, the ETFs offer a range of non-traditional emerging market exposures and include the Lyxor UCITS ETF MSCI EM Beyond BRIC (BBEM), the Lyxor UCITS ETF MSCI Select OECD Emerging Market GDP (LEMO), and the Lyxor UCITS ETF MSCI Mexico (MEXI).

The Lyxor UCITS ETF MSCI EM Beyond BRIC is linked to the MSCI EM Beyond BRIC Index. This index provides access to stocks from smaller scale and faster-growing emerging countries. It specifically excludes the so-called BRIC countries (Brazil, Russia, India and China), which typically account for a significant percentage of traditional emerging market indices but which are facing complications such as slower growth, higher inflation or excessive reliance on the energy sector. The exclusion of BRIC countries allows the fund to better capture returns of markets that will potentially experience stronger growth going forward. Indeed, over the past three years the index has delivered superior absolute returns to the MSCI Emerging Markets, at a lower volatility level.

The Lyxor UCITS ETF MSCI Select OECD Emerging Market GDP is the first ETF to track the MSCI Select OECD Emerging Markets GDP Weighted Index. This index also excludes BRIC countries and additionally concentrates on countries belonging to the OECD (Organisation for Economic Co-operation and Development) only. Many European institutional investors face regulatory restrictions on investment outside of OECD, and this innovative ETF meets these restrictive requirements by offering simplified access to emerging countries that are OECD members. A unique feature of the index is its weighting methodology: the weight of each country in the index is derived from its economic size (using GDP data) rather than the size of its equity market (market capitalisation).

The Lyxor UCITS ETF MSCI Mexico, meanwhile, tracks the performance of the MSCI Mexico Index. This free-float adjusted, market capitalisation weighted index consists of 25 stocks, including large and mid-cap companies, and covers approximately 85% of the market.

As of December 31, 2013, Lyxor had more than $44 billion of ETF assets under management acrosssome 175 funds covering equities, bonds, money markets and commodities.

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