Source, a specialist provider of exchange-traded products, has launched 18 ETFs linked to the newly created Dow Jones Stoxx 600 Optimised Supersector index family.
Source, a specialist provider of exchange-traded products, has launched 18 ETFs linked to the newly created Dow Jones Stoxx 600 Optimised Supersector index family.
The ETFs aim to deliver exposure to significantly improved sector indices and are designed to offer maximum trading flexibility, allowing investors to efficiently obtain both long and short exposure using a single product.
The Dow Jones Stoxx Optimised Supersector indices were specifically created by Source and Stoxx to address several key factors including concentration, diversification, liquidity and availability to borrow stocks in the index. One of the defining features of the new indices is that they are the first to take into account an investors’ ability to borrow a stock in the stock lending market and the index constituents are adjusted accordingly. Stoxx uses data provided by Data Explorers, an independent provider of stock lending and short interest information.
In order to ensure that its ETFs offer maximum flexibility, Source has worked with its partners – Bank of America Merrill Lynch, Goldman Sachs, Morgan Stanley and Nomura – to create a liquid and efficient lending market for the new sector products. Source says the lack of an efficient lending market for ETFs has hampered the growth of trading volumes and is a major factor in the huge difference in liquidity between the US and European ETF markets (USD75bn daily on-exchange turnover versus USD2bn).
The addition of the Supersectors brings Source’s product range to 54 across the equity and commodity segments of the market.
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