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Lyxor Launches Four New Commodity ETFs

Written by IU.eu Staff

  
January 12, 2012 16:20 (CET)

Lyxor yesterday listed four new commodity ETFs to provide investors with the ability to target specific commodity sectors.

The new funds are all based on the Standard & Poor’s GSCI Indices, with two focused on agriculture and livestock and the rest on industrial metals.

Nizam Hamid, head of ETF Strategy at Lyxor in London, said demand for the new ETFs came mostly from  institutional investors, predominantly multi-asset managers, “who desire this exposure and for whom a Ucits Compliant ETF may be preferable to either an ETN or ETC”.

“These ETFs have been part of a planned roll out and the timing reflects the continuing investor demand for both diversification opportunities and asset classes that reflect different macro economic cycles,” said Hamid.

Although Lyxor often lists its new funds in Paris first, all four have been listed using the London Stock Exchange as the primary listing.  “In this instance, especially for the US$ share class, the LSE has been chosen as offering the best trade-off between listing venue and client demand for the US$ exposure,” according to Hamid.

The ETFs will replicate the benchmark indices by using a total return swap and by investing in a basket of large cap international equities. Parent company Societe Generale is the swap counterparty.

The use of swap-based replication was the only option for these funds, according to the issuer. “Such commodity exposure cannot be replicated by physical ETFs as the indices are not linked to any underlying shares,” said Lyxor in a statement.

The Lyxor ETF S&P GSCI Agriculture & Livestock 3 Month Forward and Lyxor ETF S&P GSCI Inverse Agriculture & Livestock 1 Month Forward give investors the opportunity to go either short on long on these commodity groups, as do the Lyxor ETF S&P GSCI Industrial Metals 3 Month Forward and the Lyxor ETF S&P GSCI Inverse Industrial Metals 1 Month Forward.

Total expense ratios are set at 0.35 percent for the long funds, while the inverse products are slightly higher at 0.40 percent.

 


 



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Europe Blog

Friday, January 27, 2012 14:43 (CET)

Posted By Paul Amery

Paul Amery

By comparing two low-volatility offerings in the US, it’s easy to see why ETFs continue to gain at the expense of other funds

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