Ishares launches Eurozone equity ETF but with financials excluded

16th December 2013

iShares has launched an exchange traded fund offering exposure to eurozone equities while stripping out banks and insurance companies. The fund will be known as the iShares EURO STOXX 50® ex-Financials UCITS ETF.

The fund listed on the stock exchange on Monday 16th.

The firm says investor appetite for Europe has surged in recent months and this new fund allows investors access to a broad, but potentially less volatile, Eurozone equity exposure.

This fund will also be Europe’s first ETF to come to market with an international security structure. The launch is the result of a partnership between BlackRock and Euroclear Bank, first announced in June 2013.

Previously, when an ETF has listed and traded on multiple national exchanges in Europe, it settled in the national central securities depository (CSD) of the exchange where that trade was executed. With an international security structure however, the ETF trade can settle in a single pan-European location making settlement more efficient.

The firm says that the single international settlement venue will greatly improve and simplify the post-trade process, supporting efforts to increase liquidity and reduce costs, ultimately resulting in the growth of the European ETF market.

The iShares EURO STOXX 50® ex-Financials UCITS ETF is a physically replicating fund which invests in blue chip stocks from 12 Eurozone countries. The fund has a total expense ratio of 20 basis points.

Tom Fekete, Head of Product Development for iShares EMEA said: “We are excited to launch this fund using the new international security structure. 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.”

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