Amundi ETF is launching the first ETF in Europe tracking the S&P 500 Buyback Index. The new ETF will be listed on Euronext Paris on the 17 February and will be cross-listed soon on the main European markets.
The S&P 500 Buyback index is designed to measure the performance of the top 100 stocks in the S&P 500 index with the highest buyback ratio over the previous 12 months. Constituents are equally weighted, enabling a pure exposure to the buyback theme. The S&P 500 Buyback Index has outperformed the S&P 500 for 17 out of the last 20 years.
This investment theme is supported by a sustainable trend in corporate payout policy in the US, observed since the end of the 1990’s, whereby share repurchases exceed cash dividends and have become the dominant form of corporate payout.
Share buyback programs can be triggered by strong balance sheets or undervalued stocks: either a cash rich company chooses to return capital to shareholders or, if their stock is undervalued, they choose to take advantage of this low valuation.
With a TER of 0.15%, Amundi seeks to offer exposure through this ETF to investors looking for an alternative to dividends in their search for yield in the US equity market.
Valerie Baudson, Global Head of ETF and Indexing at Amundi, comments: “We are delighted to once again bring efficient innovation to the market. The new S&P 500 Buyback ETF adds to Amundi’s US equity range while meeting growing demand from investors for Smart Beta investment tools.”