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Cheapest ETF in Europe launches

Cheapest ETF in Europe launches

The Lyxor Core Morningstar UK NT (DR) Ucits ETF and Lyxor Core Morningstar US Equity (DR) Ucits ETF launched on the Deutsche Borse today and will launch on the London Stock Exchange on Thursday with a total expense ratio of 0.04%.

The nearest rival ETFs charge 0.07% for the same products.

“This is the US price model that we’re transporting over here to Europe,” said Lyxor head of ETF strategy for Northern Europe Adam Laird (pictured).

It is also launching the Lyxor Core MSCI Japan (DR) Ucits and Lyxor Core MSCI World (DR) Ucits ETFs, which have TERs of 0.12%. The MSCI World ETF is the cheapest of its type on offer, although a rival to the MSCI Japan ETF charges 0.9%.

Lyxor would not name the competitor products that rival it on price, but said they had compared themselves to ETFs that track the same index or similar alternatives.

The four new products join 12 existing products to form a new range of core ETFs covering the major equity markets, as well as gilts and treasury inflation-protected securities (Tips).

Besides the MSCI Japan ETF, the Lyxor Core Euro Stoxx 50 (DR) Ucits ETF is the only other product in the range that is not the cheapest in the range compared to rivals. It charges 0.07% while the cheapest alternative is 0.05%.

“We’re in a fortunate position because we’ve been doing this for a long time. Being a top-three provider means we’ve got the size and resources to launch products like this,” Laird said.

“These aren’t loss leaders. These are sustainable products. We will be able to offer these profitably for the long term. Our aim is to be low cost and quality, not cheap and nasty.”

He said the products are physically replicating and will not use securities lending.

Lyxor said fees on its Core ETF range are on average 40% lower than competitor products.

Lyxor Core range

Fund name Status Lyxor TER Closest rival
Lyxor Core Morningstar UK NT (DR) Ucits ETF New 0.04% 0.07%
Lyxor Core Morningstar US Equity (DR) Ucits ETF New 0.04% 0.07%
Lyxor Core MSCI Japan (DR) Ucits ETF New 0.12% 0.09%
Lyxor Core Euro Stoxx 50 (DR) Ucits ETF Existing 0.07% 0.05%
Lyxor Core Euro Stoxx 300 (DR) Ucits ETF Existing 0.07% 0.20%
Lyxor Core MSCI EMU (DR) Ucits ETF Existing 0.12% 0.15%
Lyxor Core Stoxx Europe 600 (DR) Ucits ETF Existing 0.07% 0.20%
Lyxor Core MSCI World (DR) Ucits ETF New 0.12% 0.15%
Lyxor Core FTSE Actuaries UK Gilts (DR) Ucits ETF Existing 0.07% 0.15%
Lyxor Core FTSE Actuaries UK Gilts 0-5yr (DR) Ucits ETF Existing 0.07% 0.15%
Lyxor Core FTSE Actuaries UK Gilts Inflation-Linked (DR) Ucits ETF Existing 0.07% 0.25%
Lyxor Core US TIPS (DR) Ucits ETF Existing 0.09% 0.17%
Lyxor Core iBoxx $ Treasuries 1-3Y (DR) Ucits ETF Existing 0.07% 0.15%
Lyxor Core iBoxx $ Treasuries 3-5Y (DR) Ucits ETF Existing 0.07% 0.15%
Lyxor Core iBoxx $ Treasuries 5-7Y (DR) Ucits ETF Existing 0.07% 0.15%
Lyxor Core iBoxx $ Treasuries  7-10Y (DR) Ucits ETF Existing 0.07% 0.15%

 

Jessica Tasman-Jones

Jessica Tasman-Jones is news editor at Portfolio Adviser and covers fund selection, asset allocation and portfolio construction for intermediaries, as well as industry news and regulation. Previously she...

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