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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 FSA Handbook: http://fsahandbook.info/FSA/html/handbook/Glossary/P

 

 

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 Asset Management UK LLP makes no representation or warranty regarding the accuracy of any information. Any reproduction, disclosure or dissemination of these materials is prohibited.

 

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 fund prospectus and the key information document available of the fund concerned.

 

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.

 

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The global water scarcity challenge

Trends such as population growth, aging infrastructure, and climate change are putting increasing pressure on water supply.

But with these challenges come opportunities, and companies around the world have embraced innovation and technology to tackle the problem.

Lyxor is committed to supporting the sustainable use of water resources by encouraging investment in companies involved in water production, infrastructure, and treatment, whilst also creating value for our clients.

Drivers of the water market

» A comparison of global water consumption since 1900 and predicted water consumption up to 2025 indicates that water consumption has increased at a faster rate than population growth.*

» Indeed, population growth combined with improved living standards in developing countries has resulted in higher per capita water consumption.*

» By 2030, the global demand for water is expected to rise by 40%; new investments in water-efficient solutions are required to meet the rising demand**

» The market value of water sector companies is expected to reach USD 1 trillion by 2020**


» There is high growth potential for players in water supply, waste water treatment and desalination as demand from developing countries is expected to rise

» Investments required to upgrade aging infrastructure in the developed nations is expected to drive growth in the sector even further.

*Source: United Nations: The World Population Prospects, 2012 Revision

** Source: Water Resources Group


​The investment opportunity set

» Water infrastructure: suppliers of pipes, pumps, valves and meters as well as various consulting firms.


» Example: Pentair PLC (Britain)


» Water treatment: suppliers of products and technology for the disinfection, filtration and desalination of water.

» Example: Severn Trent PLC (Britain)

» Water utilities: water suppliers and waste water treatment companies operate facilities and networks to safeguard the global water economy.

» Example: Veolia Environment (France)

The World Water Total Return Index

» Initial investment universe: liquid stocks of S&P Global Total Stock Market Index

» The index comprises 20 companies which have their biggest share of revenues in one or several of the following activities:

Water utilities

Water infrastructure

Water treatment


» The largest 5 stocks of each activity in terms of float adjusted market capitalisation are selected as components of the WOWAX (unless they are not liquid enough for trading).

» An additional 5 stocks are selected based on their rank (i.e. not taking into account their area of activity) to bring the total number of components to 20.

» Companies are weighted by free float market cap, with a cap of 10%

» Index live since October 2007


Name

Country

Weight

DANAHAR CORP

UNITED STATES

10.32%

GEBERIT CORP

SWITZERLAND

9.53%

VEOLIA ENVIRONNEMENT

FRANCE

8.59%

AMERICAN WATER WORKS CO INC

UNITED STATES

7.84%

MASCO CORP

UNITED STATES

7.82%

PENTAIR PLC

BRITAIN

7.72%

UNITED UTILITY GROUP PLC

BRITAIN

7.57%

SEVEN TRENT PLC

BRITAIN

6.07%

WYLEM INC

UNITED STATES

5.18%

SUEZ ENVIRONNEMENT CO

FRANCE

5.10%



Example of index company involvement



Veolia Water partnered with Indian Government to provide drinking water service operation and maintenance for 25 years in Nagpur City, a rapidly growing city of 2.7 million inhabitants.

​The Lyxor World Water UCITS ETF

» The Lyxor World Water UCITS ETF tracks the World Water Total Return Index, offering you exposure to 20 companies around the world from the water sector.

» Over the past three years, the fund’s AuM has increased by 348%, reaching a total of USD 373m.*

*Source: Lyxor. Data as at 27/11/15.




ETF name

Tradding Currency

BBG TICKER

TER

Aum (27/11/15)

Lyxor world water UCITS ETF 

GBP

WATL LN

0.60%

USD 373 m

EUR

WAT FP





Performance 1Y

Performance 3Y

Performance 5Y

Performance 10Y

Lyxor index

26.36%

93.05%

129.42%

180.79%

ishares Index

17.83%

70.75%

99.81%

152.54%

MSCI wORLD Index

16.45%

68.72%

93.87%

85.13%




Volatility
1Y

Volatility
3Y

Volatility
5Y

Volatility 10Y

Lyxor index

17.26%

13.37%

13.24%

16.05%

ishares Index

16.54%

13.00%

13.43%

16.65%

MSCI wORLD Index

17.65%

13.15%

13.23%

16.29%

World Water indices vs. MSCI World

Source: Lyxor Research. Data from 25/11/05 to 25/11/15. Past performance is not a reliable indicator of future returns.

8 year track record with surge of inflows in the last 3 years

Source: Lyxor/Bloomberg. Data period from 24/10/07 to 01/12/15. Past results are not a reliable indicator of future inflows.