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Please read the important information below before continuing to our website.  

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THIS WEBSITE IS AIMED AT PROFESSIONAL CLIENTS IN THE UK

The information on this website is published in the UK by Lyxor Asset Management UK LLP (Lyxor UK), which is authorized by Financial Conduct Authority in the UK, under FCA Registration Number 435658.

 

The website is hosted by on Microsoft Azure servers.

This website is subject to French law and English Law

 

A professional client is a client that is either a per se professional client or an elective professional client  (Note article 4 (1) 12 of Mifid )

 

A professional client is one of the following:

– an entity required to be authorised or regulated to operate in the financial markets. The following list includes all authorised entities carrying out the characteristic activities of the entities mentioned, whether authorised by an EEA State or a third country and whether or not authorised by reference to a directive:

  • a credit institution
  • an investment firm
  • any other authorised or regulated financial institution
  • an insurance company
  • a collective investment scheme or the management company of such a scheme
  • a pension fund or the management company of a pension fund
  • a commodity or commodity derivatives dealer
  • a local
  • any other institutional investor

– in relation to MiFID or equivalent third country business, a large undertaking, meeting two of the following size requirements on a company basis:

  • balance sheet total of EUR 20,000,000
  • net turnover of EUR 40,000,000
  • own funds of EUR 2,000,000

– in relation to business that is neither MiFID or equivalent third country business, a large undertaking meeting either of the following conditions:

  • a body corporate (including a limited liability partnership) which has (or any of whose holding companies or subsidiaries has) called up share capital of at least £10 million (or its equivalent in any other currency at the relevant time)
  • a large undertaking that meets (or any of whose holding companies or subsidiaries meets) two of the following tests: (i) a balance sheet total of EUR 12,500,000; (ii) a net turnover of EUR 25,000,000; (iii) an average number of employees during the year of 250
  • a national or regional government, a public body that manages public debt, a central bank, an international or supranational institution (such as the World Bank, the IMF, the ECP, the EIB) or another similar international organisation.
  • another institutional investor whose main activity is to invest in financial instruments (in relation to the firm's MiFID or equivalent third country business) or designated investments (in relation to the firm's other business). This includes entities dedicated to the securitisation of assets or other financing transactions.

 

The above definition is only an extract and is not exhaustive. For further details please refer to the Glossary section of the FCA Handbook: https://www.handbook.fca.org.uk/handbook/glossary/

 

 

Lyxor and Lyxor ETF are names used by Lyxor Asset Management UK LLP to promote the products of Lyxor International Asset Management. Although information contained herein is from sources believed to be reliable, Lyxor UK makes no representation or warranty regarding the accuracy af any information. Any reproduction, disclosure or dissemination of these materials is prohibited. This site is maintained by Lyxor UK, SG House, 41 Towar Hill, London EC3N 4SG.

 

 

Marketing Restrictions and Implications

 

Lyxor UCITS compliant Exchange Traded Funds (Lyxor UCITS ETFs) referred to on this website are open ended mutual investment funds (i) established under the French law and approved by the Autorité des Marchés Financiers (the French Financial Markets Authority), or (ii) established under the Luxembourg law and approved by the Commission de Surveillance du Secteur Financier (the Luxembourg Financial Supervisory Committee). Most, if not all, of the protections provided by the UK regulatory system generally and for UK authorised funds do not apply to these exchange traded funds (ETFs). In particular, investors should note that holdings in this product will not be covered by the provisions of the Financial Services Compensation Scheme, or by any similar scheme in France.

 

This website is exclusively intended for persons who are not "US persons", as such term is defined in Regulation S or the US Securities Act 1933, as amended, and who are not physically present in the US. This website does not constitute an offer or an invitation to purchase any securities in the United States or in any other jurisdiction in which such offer or invitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. Potential users of this website are requested to inform themselves about and to observe any such restrictions.

 

 

 

 

Index Replication Process

 

Lyxor UCITS ETFs follow both physical and synthetic index replication process.

 

However, most Lyxor UCITS ETFs follow synthetic replication process. This consists of entering into a derivative transaction (a ‘Performance Swap’, as defined below) with a counterparty that provides complete and effective exposure to its benchmark index. Lyxor has adopted this methodology in order to minimise tracking error, optimise transaction costs and reduce operational risks.

 

A Performance Swap is a contractual agreement which is negotiated over-the-counter (OTC) between two parties: the Lyxor UCITS ETF and its counterparty. From a risk perspective, each Performance Swap ranks equally with other senior unsecured obligations of the counterparty, such as common bonds (i.e., same rights to payments). In the Performance Swap, the counterparty of the Lyxor UCITS ETF commits to pay the Lyxor UCITS ETF a variable return based on a pre-determined benchmark index, instead of a fixed stream of income (as in bonds). At the same time, the counterparty will receive from the Lyxor UCITS ETF the performance and any related revenues generated by the basket's assets (excluding the value of the Performance Swap) held by the Lyxor UCITS ETF. Information provided on individual ETFs includes data on the basket relating to the ETF and the percentage value of the basket represented by each asset. The information is relevant to the closing values on the date given. 

 

Investment Risks

 

The Lyxor UCITS ETFs described on this website are not suitable for everyone. Investors' capital is at risk. Investors should not deal in this product unless they understand, having obtained independent professional advice where necessary, its nature, terms and conditions, and the extent of their exposure to risk. The value of the product can go down as well as up and can be subject to volatility due to factors such as price changes in the underlying instrument and interest rates. If a fund is quoted in a different currency to the index, currency risks exist.

 

Prior to any investment in any Lyxor UCITS ETF, you should make your own appraisal of the risks from a financial, legal and tax perspective, without relying exclusively on the information provided by us. We recommend that you consult your own independent professional advisors (including legal, tax, financial or accounting advisors, as appropriate).

 

Specific Risks

 

·         Capital at Risk. ETFs are tracking instruments: Their risk profile is similar to a direct investment in the Benchmark Index. Investors’ capital is fully at risk and investors may not get back the amount originally invested. Investments are not covered by the provisions of the Financial Services Compensation Scheme (“FSCS”), or any similar scheme.

·         Counterparty Risk. Investors may be exposed to risks resulting from the use of an OTC Swap with Societe Generale. Physical ETFs may have Counterparty Risk resulting from the use of a Securities Lending Programme.

·         Currency Risk. ETFs may be exposed to currency risk if the ETF or Benchmark Index holdings are denominated in a currency different to that of the Benchmark Index they are tracking. This means that exchange rate fluctuations could have a negative or positive effect on returns.

·         Replication Risk. ETFs are designed to replicate the performance of the Benchmark Index. Unexpected events relating to the constituents of the Benchmark Index may impact the Index provider’s ability to calculate the Benchmark Index, which may affect the ETF’s ability to replicate the Benchmark Index efficiently. This may create Tracking Error in the ETF.

·         Underlying Risk. The Benchmark Index of a Lyxor ETF may be complex and volatile. When investing in commodities, the Benchmark Index is calculated with reference to commodity futures contracts which can expose investors to risks related to the cost of carry and transportation. ETFs exposed to Emerging Markets carry a greater risk of potential loss than investment in Developed Markets as they are exposed to a wide range of unpredictable Emerging Market risks.

·         Liquidity Risk. On-exchange liquidity may be limited as a result of a suspension in the underlying market represented by the Benchmark Index tracked by the ETF; a failure in the systems of one of the relevant stock exchanges, Societe Generale or other Market Maker systems; or an abnormal trading situation or event.

 

The securities can be neither offered in nor transferred to the United States.

 

Tax

 

Any statement in relation to tax, where made, is generic and non-exhaustive and is based on our understanding of the laws and practice in force as of the date of this document and is subject to any changes in law and practice and the interpretation and application thereof, which changes could be made with retroactive effect. Any such statement must not be construed as tax advice and must not be relied upon. The tax treatment of investments will, inter alia, depend on an individual’s circumstances. Investors must consult with an appropriate professional tax adviser to ascertain for themselves the taxation consequences of acquiring, holding and/or disposing of any investments mentioned on this website. 

 

Further information on the risk factors are available in the [Risk Warning – link to risk page] section of the website.

 

Any fund prospectus and supplements are available at www.lyxoretf.co.uk. Information given about the past performance of the funds is no guarantee of future performance. No investment decision should be taken without reading the Legal Documents relating to the particuler Exchange Traded Fund concerned. A copy of the Legal Documents may be obtained from Lyxor UK at SG House, 41 Tower Hill, London EC3N 4SG upon request. 

 

Although the content of the website is based upon information that Lyxor UK consider reliable or comes from sources that Lyxor UK consider reliable, Lyxor UK has not verified such information. Lyxor UK make no representation or warranty as to the accuracy, completeness or adequacy of any information.  Any reproduction, disclosure or dissemination of the materials available on the website is prohibited.

 

Cookies

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By clicking on your client type to enter the website, you shall be deemed to have represented to us that you are not a U.S. person and that you are not located in the United States of America, its territories and possessions, and any State of the United States of America and that you are authorised to receive the information to and on this website.

 

 

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22 Mar 2021

Our EURO STOXX 50 ETF just turned 20

This week, Lyxor celebrates 20 years since it launched its EURO STOXX 50 ETF. To mark this anniversary, Lyxor Head of ETF and Indexing Arnaud Llinas and Stephan Flagel, Head of Indices and Benchmarks at Qontigo, discuss how both the index and the ETF have evolved during these two decades, and explain how ETFs continue to lead a technological revolution in the financial sector, in particular in the context of ESG and Thematic investing.
 
How significant is the 20th anniversary of the launch of Lyxor’s ETF on the EURO STOXX 50 index?
 
Arnaud Llinas: This is a very significant anniversary for Lyxor Asset Management. The EURO STOXX 50 is one of the top five indices in the world, alongside the S&P 500, NASDAQ-100, FTSE 100 and DAX. Twenty years ago was the right time to launch the Lyxor EURO STOXX 50 UCITS ETF. The EURO STOXX 50 was already the main benchmark for Eurozone equities in 2001, and in the past 20 years it has further cemented its role as the main index of reference for the region.
 
It’s been an outstanding 20 years for ETFs, up on average 20% a year in Europe in terms of assets, thanks to an ever-expanding range of investors — from individual investors to multi-asset managers, diversified portfolio managers, and more recently a significant growth with private banks and retail investors, who are more aware than ever of the advantages that ETFs bring.

Stephan Flagel: The history of the EURO STOXX 50 and of the Lyxor EURO STOXX 50 UCITS ETF runs parallel to our own histories as companies. We have grown together in the past 20 years, so this anniversary is especially meaningful for us. The outstanding feature over this period is how the ETF has established itself as a vehicle of choice for both strategic and tactical investments, and positioned itself right at the core of very different types of portfolios. Institutional, retail investors and traders today turn to ETFs as a natural choice. The move to passive investing has been nothing short of a quiet revolution that has democratised and facilitated investing.

The Lyxor EURO STOXX 50 UCITS ETF has been at the center of this revolution in Europe, contributing to the EURO STOXX 50’s position as the undisputed benchmark for Eurozone blue-chips. Since its inception in 1998, the EURO STOXX 50 index has closely tracked the fate of the best-known European companies and has been an accurate barometer of the region’s economic evolution. The index has also reflected the Eurozone’s changing industry dynamics: over the past two decades, financials, energy, utilities and telecommunications shares lost ground, while industrials, basic-materials, healthcare and consumer-related companies gained in weight.

Why have ETFs become so popular?
 
Arnaud Llinas: The quiet revolution that Stephan mentioned is the growing awareness of how much ETFs have brought efficiency, simplicity, transparency, and, importantly, low cost to financial markets. The Lyxor EURO STOXX 50 ETF is the perfect illustration of this. It is an exact representation of the entire index, without the friction or liquidity costs of buying the basket of 50 shares. For example, if a retail investor wanted to buy the shares of each company in the index, it would cost them around 2,500 euros. But investors can buy the ETF, giving them an investment in the complete EURO STOXX 50 range, for as little as 50 euros.  
 
Stephan Flagel: ETFs have brought great efficiency to investing, and for investors, the ease and affordability of trading an entire basket of stocks in one go is an unbeatable proposition. Within this efficient wrapper lies an underlying index that brings transparency, neutrality and a rules-based methodology to stock selection, giving investors certainty and clarity as to what they hold. ETFs are also these days a near guarantee of liquidity, which has been a huge benefit during the various crises we’ve seen on markets in the last two decades. Very few indices in the world offer the liquidity and tradability of the EURO STOXX 50. Just to illustrate this, nearly 30 million futures tracking the index trade every month, further supporting liquidity in its ETFs.
 
What does the future hold for the Lyxor EURO STOXX 50 ETF, and more broadly for ETFs?
 
Arnaud Llinas: ETFs have established themselves as an efficient investment model that continues to lead in technological innovation. Surveys point to increased usage in coming years, and investors will undoubtedly benefit from continued growth of the EURO STOXX 50.
 
The focus now is on the new generation of investors – especially retail investors and private banks – looking for cheap and efficient investment vehicles. To better respond to their needs, we also offer a low-cost Core EURO STOXX 50 ETF. This next generation of investors is also looking beyond traditional allocation by markets and sectors, which is why we are seeing more thematic investments, and also a boom in ESG investments.
 
On March 10th, the European Sustainable Finance Disclosures Regulation (SFDR) went into force, requiring asset managers to disclose more information on ESG products and to describe the climate transition elements of each asset in the prospectus where applicable. This is a significant moment that will have an impact on the future of ETFs, and I can foresee that in 20 years from now, ESG and non-ESG regulatory requirements will merge, and that all indices will have to include extra-financial criteria.
 
Stephan Flagel: I think we’ll see significant growth in the ESG version of the EURO STOXX 50 index, with many pension funds and large asset owners adopting it in coming years as the benchmark for Eurozone portfolios. Sustainability is one of a dozen families built from the flagship EURO STOXX 50 and its methodology. As investing becomes ever-more sophisticated, I expect to see more solutions built around these index offerings, to the benefit of a wider public.
 
This will further enhance the EURO STOXX 50 universe and pave the way for more successful and popular ETFs. We are extremely proud and pleased with the success of the Lyxor EURO STOXX 50 (DR) UCITS ETF and look forward to continuing developing the Qontigo-Lyxor partnership over the next two decades.
 
 
Learn more about Lyxor ETF’s ESG offering, or explore our innovative Thematic range.