Amundi cross-lists European buyback ETF in Germany

Nov 19th, 2015 | By | Category: Equities

Amundi, a leading European provider of exchange-traded funds, has announced the cross-listing of the Amundi MSCI Europe Buyback UCITS ETF on Xetra and the Börse Frankfurt. This smart beta fund aims to provide exposure to European companies that are undertaking share buyback programmes.

Amundi cross-lists European buyback ETF in Germany

Amundi’s buyback ETF targets European companies with significant buyback yields.

The ETF was listed on the London Stock Exchange in September 2015 in response to client demand following the success of their US-focused buyback ETF.

MSCI has provided the underlying index for the fund, the MSCI Europe Equal Weighted Buyback Yield Index, which has outperformed its parent index, MSCI Europe, in 13 of the last 14 years.

Valerie Baudson, CEO at Amundi ETF, Indexing and Smart Beta, said: “This innovative ETF adds to our smart beta range and reinforces the positioning of Amundi as a leading innovative player in the European ETF market.”

According to Amundi, the ETF is designed for investors who are seeking yield from the European equity market via a return-oriented smart beta approach, by providing exposure to companies performing share buybacks, a way of distributing value to shareholders which is likely to grow in Europe.

Share buybacks, like dividends, are a method for corporations to return capital to shareholders. US companies have been following buyback strategies for many years and Amundi expect this trend to become more prevalent amongst European companies as a more efficient use of cash in a low rate environment.

Constituents are selected from the parent index based on their buyback yield over the past 12 months. This is calculated as a ratio of the change in shares outstanding over the past 12 months to the current number of shares outstanding. Companies are first screened to exclude those with a buyback yield below 0.1%. This is done in an attempt to remove companies who are buying back shares for reasons that are not deemed as positive for the broad shareholder base, such as buybacks used to offset other sources of share issuance, for example, from an Employee Stock Options Program.

An equal weight methodology is applied to the constituents for the purposes of diversification and to provide a purer exposure to the share buyback theme, with reduced bias to any one constituent.

The ETF has a total expense ratio of 0.3%.

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