Barclays Global Investors is to announce the launch of its second exchange traded fund into the UK m...
Barclays Global Investors is to announce the launch of its second exchange traded fund into the UK market in the next three weeks which will have a technology bias.
BGI launched the first UK exchange traded fund, the iFTSE 100, in April to track the FTSE 100 and at the time announced that it planned to launch between six and 12 further funds to track major world indices before the middle of 2001.
John Demaine, managing director of BGI's product division, said that even though the proposed fund was a tracker, BGI was not in a position to indicate what index it would track.
Demaine said: "The launch is progressing well but it is too early to release details. It will track a UK index with a technology bias. It is a sector or a market segment-style product."
The Techmark 100 is the UK's technology-only index and is a prime candidate for the new iShare to track.
Exchange traded funds are listed on the market and are bought and sold like shares, giving investors exposure to the underlying index. Unlike investment trusts, however, exchange traded funds are insulated against trading at a substantial discount to NAV because they are open-ended. Because they are traded as shares there are no front end loads or exit charges.
In the period from launch to 31 August, the iFTSE 100 delivered returns of 7.97% to investors compared to FTSE 100 performance of 7.98%. Assets under management have grown to £110.16m on 31 August compared to £94.9m at 31 July.
BGI imported the concept from the US, where the company already operates 18 of the existing 31 exchange traded funds which track indices such as the S&P500, Nasdaq and MSCI.
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