Un ETF issuer announced the launch of its new.…
MSCI Emerging Markets ETF (MXFS LN), tracking the MSCI Emerging Markets Total Return (net) index.
This Source ETF will provide consistent tracking of its underlying benchmark through Source’s highly efficient multi-counterparty derivative approach. The new product will achieve the performance of the index by entering into total return swaps, thereby providing better returns than are currently being delivered in these products in Europe.
In addition, it is listed on the London Stock Exchange and trades in USD, thereby minimising foreign exchange related tracking error.
Tracking error, particularly on emerging market products, has been a significant concern for investors. The tracking error on existing ETFs based on MSCI Emerging Markets index ranges from 1% to 5.2%. This is caused by optimisation strategies, operational costs, dividend treatment and foreign exchange impact.
Emerging market ETFs have gained increasing popularity since their launch in 2004 and particularly this past year. Over the last 15 months, there has been more than US$3.6 Bn inflows in emerging markets ETFs in Europe, taking the total AuM to US$26 Bn as of end of March 2010. The four ETFs based on the MSCI Emerging Markets index currently represent 43% of total European emerging markets ETF AuM.
Ted Hood, Source CEO commented: “Clients have been asking us to provide ETFs that offer consistent tracking to EM benchmarks and today we can offer that to MSCI EM, the most widely used broad benchmark in the market. Source continues to deliver best of breed products that tackle inefficiencies in the current markets. ”
Product Summary
Product Name: MSCI Emerging Markets Source ETF
Bloomberg Ticker: MXFS LN
Fund and trading currency: USD
Listing: London Stock Exchange (LSE)
Index Name: MSCI Emerging Markets Total Return (net) Index
Index Ticker: NDUEEGF
Dividends: Continuously reinvested
Source continues to focus on delivering incremental value to European ETF investors through a combination of enhanced indices, improved structuring and active trading.
Source UK Services Limited is regulated by the UK Financial Services Authority.
Source: ETFWorld – Source
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