Cheapest ETF in Europe launches

Lyxor Asset Management is launching the cheapest ETF in Europe this week, bringing prices in the UK and the Continent in line with US products.

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The Lyxor Core Morningstar UK NT (DR) Ucits ETF and Lyxor Core Morningstar US Equity (DR) Ucits ETF launch on the Deutsche Borse on Wednesday and the London Stock Exchange on Thursday with a total expenses 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 nameStatus Lyxor TERClosest rival
Lyxor Core Morningstar UK NT (DR) Ucits ETFNew0.04%0.07%
Lyxor Core Morningstar US Equity (DR) Ucits ETFNew0.04%0.07%
Lyxor Core MSCI Japan (DR) Ucits ETFNew0.12%0.09%
Lyxor Core Euro Stoxx 50 (DR) Ucits ETFExisting0.07%0.05%
Lyxor Core Euro Stoxx 300 (DR) Ucits ETFExisting0.07%0.20%
Lyxor Core MSCI EMU (DR) Ucits ETFExisting0.12%0.15%
Lyxor Core Stoxx Europe 600 (DR) Ucits ETFExisting0.07%0.20%
Lyxor Core MSCI World (DR) Ucits ETFNew0.12%0.15%
Lyxor Core FTSE Actuaries UK Gilts (DR) Ucits ETFExisting0.07%0.15%
Lyxor Core FTSE Actuaries UK Gilts 0-5yr (DR) Ucits ETFExisting0.07%0.15%
Lyxor Core FTSE Actuaries UK Gilts Inflation-Linked (DR) Ucits ETFExisting0.07%0.25%
Lyxor Core US TIPS (DR) Ucits ETFExisting0.09%0.17%
Lyxor Core iBoxx $ Treasuries 1-3Y (DR) Ucits ETFExisting0.07%0.15%
Lyxor Core iBoxx $ Treasuries 3-5Y (DR) Ucits ETFExisting0.07%0.15%
Lyxor Core iBoxx $ Treasuries 5-7Y (DR) Ucits ETFExisting0.07%0.15%
Lyxor Core iBoxx $ Treasuries  7-10Y (DR) Ucits ETFExisting0.07%0.15%

 

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