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New ETF to transform European market
16 December 2013
iShares has just launched the first ETF in Europe to have an international security structure
iShares has pioneered more efficient settlement in the European
exchange traded fund (ETF) market.
The asset manager has joined forces with Euroclear to launch
Europe's first ETF that can be settled in one pan-European
This move is a big step forward for the European ETF industry
given that these funds have typically settled in the national
CSD of the exchange where that trade was executed.
iShares said the international security structure will "greatly
improve and simplify" the post-trade process that will
ultimately result in growth in the European ETF market.
Stephan Pouyat, global head of international markets, Euroclear
said: "We're hugely proud of the results of our work with
BlackRock this year. The realisation of this new international
ETF asset class marks another step in the development and
maturation of the European ETF market.
"Simplifying the issuance process and providing uniform
settlement practices regardless of trading venue will make it
easier for investors to trade these ETFs. This will ultimately
improve liquidity in the market, which should have a positive
effect on processing costs for the end investor."
The new fund - iShares euro STOXX 50® ex-financials Ucits
ETF - is physically-replicating, investing in blue chip stocks
from 12 Eurozone countries, while excluding companies from the
financial sector, potentially providing investors with a less
volatile exposure to eurozone equities. The fund has a total
expense ratio of 20 basis points.
"Eurozone financial stocks are likely to exhibit volatility in
2014 and this ETF provides a building block for investors to
express their views, by either side-stepping the sector or
specifically targeting it by adding other financials-focused
funds or single stocks to their portfolios," said Tom Fekete,
head of product development for iShares Emea.