iShares, the exchange-traded fund arm of asset manager BlackRock, has launched euro-denominated share classes of existing ETFs, targeting US sector-specific exposure, on Deutsche Borse’s Xetra and Frankfurt exchanges. The five cross-listed ETFs invest in securities of S&P 500 companies that are classified as operating within the healthcare, financials, information technology, consumer discretionary, or energy sectors as determined by the Global Industry Classification Standards.

iShares has cross-listed five ETFs on Deutsche Borse’s Xetra and Frankfurt exchanges, offering exposure to the energy, information technology, financials, consumer discretionary, and healthcare sectors of the US economy.

Sector-specific ETFs allow investors to make strategic allocations to a targeted segment of an economy based on their views for the future performance of that industry. As each sector responds differently at various stages of the business cycle, these ETFs also provide investors with a means to tailor their exposure according to whether they view a future contraction or expansion of the economy.

For example, financials and consumer discretionary ETFs have historically outperformed during the early phase of the cycle due to an increasingly favourable interest rate environment and a backdrop of economic improvement. As the recovery sets in, technology ETFs may provide superior returns as market participants review their expectations for growth in the economy and forecast a greater demand for technology-based products. Information technology ETFs therefore tend to outperform during the end of the early-recovery stage and through the middle of the cycle.

Energy ETFs have also historically outperformed approaching the mid-cycle of the recovery as inflationary pressures, including energy prices, are generally lower at the start of a recovery than closer to a recession.

Defensive sector ETFs are generally favoured during the late stages of a recovery and through the economy’s recession. During this time these funds, including healthcare ETFs, have traditionally provided a means of protecting investor wealth as industry earnings are based on human necessities and are less prone to fluctuations.

By cross-listing the ETFs with euro-denominated share classes, iShares has offered further choice to investors who may wish to express a view on future currency fluctuations against the US dollar. Each ETF has its primary listing on the London Stock Exchange where they are traded in either US dollars or British pounds.

The five newly cross-listed ETFs are:

iShares S&P 500 Information Technology Sector UCITS ETF (IUIT)
iShares S&P 500 Energy Sector UCITS ETF (IUES)
iShares S&P 500 Consumer Discretionary Sector UCITS ETF (IUCD)
iShares S&P 500 Financials Sector UCITS ETF (IUFS)
iShares S&P 500 Healthcare Sector UCITS ETF (IUHC)