The launch of three new exchange traded funds (ETFs) could mark the start of a major expansion of the ETF market, says the London Stock Exchange.
Lyxor Asset Management, a subsidiary of Société Générale Group, has become the first new ETF provider to join the LSE’s growing ETF sector since a change to stamp duty rules was introduced. The new rules make it easier for overseas firms to issue new market traded index trackers in the UK.
The three ETFs launched by Lyxor are the Lyxor ETF FTSE All-Share, the Lyxor ETF FTSE100, and the Lyxor FTSE250. They bring the total number of ETFs offered by the LSE to 53.
The LSE says the new additions “mark the start of what is expected to be a significant expansion of the UK ETF market”. It points out Lyxor’s All-Share ETF is the first fund of its kind to offer exposure to the entire index, while the FTSE100 and FTSE250 will give investors a choice of tracking all the major UK indices.
Martin Graham, director of markets at the LSE, says the launch represents an important step forward in the development of the UK ETF marketplace, as the 53 ETFs available now cover a range of UK and global equity and bond indices.
The LSE also reveals in 2006 the total value traded in ETFs grew to £18.1bn, nearly double the value traded on the exchange in the previous year.
Graham adds: “Trading in ETFs has increased steadily as more and more institutional and private investors have become aware of the flexibility that ETFs have to offer combined with low costs of trading and ownership.”
“Now the stamp duty disadvantage to ETFs has been removed, we expect to see London soon gain its rightful place as one of the world’s leading ETF markets.”
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