Lyxor has issued a challenge to Source with the listing of nine new ETFs tracking sector indices based on the S&P 500.

The issuer’s new ETFs compete directly with Source’s ETFs based on the S&P Select Sector Capped 20 percent indices, but offer a total expense ratio of 0.20 percent, undercutting Source’s management fee of 0.30 percent.

The underlying indices are based on stocks included in the S&P 500, broken down into the consumer discretionary, consumer staples, energy, financials, health care, industrials, materials, technology and utilities sectors.

The indices are market capitalisation weighted, but the methodology has been modified to comply with UCITS rules so that no individual stock can have a weighting of more than 20 percent. The sector classifications also vary slightly from the Global Industry Classification Standard, with the telecommunication services and information technology sectors combined into one technology sector.

Lyxor’s new funds are listed on NYSE Euronext, while Source’s products have been listed on the London Stock Exchange since December 2009.

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