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European exchange-traded products provider Source has cross-listed two of its flagship exchange-traded funds (ETFs) on the SIX Swiss Exchange: the Man GLG Europe Plus Source ETF (MPFE) and the JP Morgan Macro Hedge Dual Source ETF (MHDU).
The two funds are among the London-based firm’s most successful, in terms of assets under management, and also most innovative. Aimed at sophisticated investors, they provide smart beta exposure to European equities and a fusion of US and European equity volatility, respectively.
The Man GLG Europe Plus Source ETF, which also maintains listings on the London Stock Exchange and the Deutsche Börse (Xetra), has proved particularly popular, accruing assets of €668 million since its launch in January 2011.
Developed by hedge fund giant Man GLG, the fund’s underlying index, the Man GLG Europe Plus Index, is designed to outperform the broad European equity market by systematically capturing alpha uncovered by broker research. The index synthesises high-quality ideas from around 65 leading brokers to create a liquid, highly diversified, long-only European equity index. Its track record is pretty impressive. In 2012, the index outperformed MSCI Europe Index by 5.34%.
By contrast, the JP Morgan Macro Hedge Dual Source ETF offers a completely different type of exposure. This fund, which is also listed on the London Stock Exchange, follows the JP Morgan Macro Hedge Dual TR Index and aims to provide cost-effective exposure to equity market volatility, as reflected by equity volatility futures.
Designed to be used as a hedging tool, the fund exploits information present in the term structure of VIX and VSTOXX futures to not only capture spikes in volatility during times of market stress, but also to generate a positive return when markets are calmer. It achieves this by dynamically allocating exposure to VIX and VSTOXX futures depending on the degree of contango or backwardation across contract months.
Commenting on the listings, Mark Vallon, Director of Institutional Sales for Switzerland & Liechtenstein at Source, said: “Working with partners like Man GLG and JP Morgan allows us to offer greater value to investors. By listing both traditional benchmarks and these value-added products on SIX, we are providing increased choice for Swiss and international investors.”