ETF providers including Lyxor have signed licence agreements with Standard & Poor's to launch funds on the S&P 500 index.
Lyxor says it has signed a licence agreement with S&P and will provide product development details imminently.
Other issuers such as Source say they are considering launching a fund on the S&P 500 now that it is available for further licensing.
Source director of marketing Michael John Lytle says: "We are actively considering launching a fund on the S&P 500. It is part of offering your clients a full range of market exposures."
The race to launch funds on the US benchmark follows the end of an exclusive agreement on 17 May whereby iShares has been the only issuer in Europe with the right to use the S&P 500 to underlie its ETFs, for the last 10 years.
Last week, Deutsche Bank announced it has launched its S&P 500 Index ETF, which is due to be listed across exchanges in Europe and Asia from 17 May.
At present, the fund is available for institutional investors to trade directly with Deutsche Bank on an over-the-counter basis.
Head of db x-trackers UK Manooj Mistry says: "With the synthetic replication method, we can make sure we have perfect tracking. The fund has an attractive total expense ratio of 20 basis points and combined with high liquidity and the ability to trade on exchange, we think this fund will be attractive to investors."
He explains the nature of the European market is fragmented, with differing tax and regulatory structures across jurisdictions, meaning Europe can support multiple funds on indices. For example, he says there are 32 ETFs on the Eurostoxx 50 now and most have got decent assets.
Mistry adds: "As Europe is fragmented, issuers' distribution channels are fragmented. It's ultimately down to how the issuer distributes the product, whether they're targeting retail, institutional or both types of investor - this will achieve the success."
Credit Suisse Global Head of ETFs Daniel Draper says in Europe, there are still a substantial number of holders of the S&P 500 ETFs that are listed in the US. However, there is withholding of dividends paid to holders who are outside the US. This can range from between 15-30% which investors lose from the dividend.
He says: "If the licences are opening up to other parties, you'll have more options available and there will be more issuers bringing in more liquidity into the European market. As people become more aware of the tax treatment on dividends, it will be a lot more attractive for them to own the Ucits ETF version of the S&P 500."
He adds: "Once these ETFs get big enough, with a lot of assets, there will be better liquidity and price discovery in the European morning than ever before. This will really benefit European investors so they feel confident ahead of the US market opening they can take a view on this market and get good liquidity even when it's closed."
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