Bringing you live news and features since 2006 

Lyxor cuts the cost of core Fixed Income ETFs

RELATED TOPICS​

As of January 29th, 2016 Lyxor has cut fees on its longstanding Gilt and Treasury ETFs to 0.07 per cent% and UK & US Corporate Bond ETFs to 0.09 per cent in order to improve value for fixed income investors. 

With EUR112 billion invested, Fixed Income ETFs represent approximately 25 per cent of the total European ETF market, but with more than 35 per cent of last year’s new assets collected in Fixed Income exposures, this is an increasingly important part of the market.
 
The firm writes that to date, fixed income ETFs have been out of step with core equity exposures, with TERs typically in the region of 0.15 per cent for Gilts, Treasuries and corporate bonds. “In a low yield environment where for example two year Gilts yield less than 0.5 per cent, these costs significantly diminish an investor’s return. Lyxor’s cost reductions mean that investors can now get better performance,” the firm says.
 
Discussing this latest move, Chanchal Samadder, Head of UK and Ireland ETF Sales for Lyxor says: “We wanted to create a range of core fixed income exposures that are safe, liquid and low cost. These are staple, safe haven exposures in most portfolios and we wanted to give investors a better deal”.
 
Lyxor opted for physical replication with no securities lending for Govies, deciding that the benefit to investors is not sufficient to offset the considerable additional risk. However, the firm writes that Corporate Bond exposures are an example where performance can be improved using Synthetic Replication, which is why Lyxor employed this approach in this area. “This is consistent with Lyxor’s pragmatic approach to replication that aims to employ the replication method that will deliver the best results for investors in a particular asset class.”
 
 
 

Latest News

Saving and investing app, Moneybox, has doubled the number of ETFs available on the platform, in the light of ‘growing..
Global X ETFs has announced the appointment of Ryan O'Connor as its Chief Executive Officer effective as of April 8, 2024. ..
Value-driven structured credit investing firm, Angel Oak Capital Advisors, LLC, has announced the completed conversions of two of its mutual..
Confidence in the continuing strength of bitcoin and Ethereum is driving wider interest in altcoins and other digital assets, according..

Related Articles

Graham MacKenzie, Toronto Stock Exchange
The evolution of ETFs has been a multi-decade experience for Toronto Stock Exchange says Graham MacKenzie, managing director, Exchange Traded...
Frank Koudelka, State Street Global Services
ETF data provider and ETF Express data partner, Trackinsight, has published its Global ETF Survey 2024 Report: ‘50+ Charts on...
Cryptocurrencies
Matteo Greco, Research Analyst at Fineqia International writes that bitcoin (BTC) ended the week at approximately USD52,150, showing a notable...
US Distribution Awards trophies
The winners of the first US ETF Distribution Awards at the Exchange conference, hosted by ETF Express and sponsored by...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by