EasyETF Euro Stoxx adopts a synthetic replication approach

By leveraging on an open architecture swap bidding model and the critical size and expertise of THEAM’s structuring desk, EasyETF Euro Stoxx will benefit from very competitive swap prices. With lower transaction costs, both performance and Tracking Error will be improved. While the current Tracking Error of the ETF is 15 bp as at end of September, we expect it to be less than 10 bp in one year.

At THEAM, we believe that both full and synthetic approaches have their own advantages and drawbacks and that depending on the index to replicate, one has greater benefits than the other. While full replication is highly convenient for concentrated indices, synthetic replication is more appropriated for large indices or difficult-to-access underlyings.

At THEAM, 50% of the ETF assets are replicated in full and 50% are replicated through a synthetic approach.