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Lyxor launches Europe’s first Emerging Markets ex-China ETF

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Lyxor has launched what it says is Europe’s first Emerging Markets (EM) ex-China ETF, which gives investors a simple, cost-effective way to access a variety of developing economies outside of China.

China will provide around 28 per cent of global GDP growth in 2019-2020, according to Bloomberg’s analysis of the IMF World Economic Outlook (April 2019). Yet many European investors wishing to access China still use broad EM funds which group it together with smaller developing countries, making it hard to manage their allocation to Asia’s superpower precisely.

Given China’s size, high population and ongoing market liberalisation, Lyxor believes the country should play a bigger role in portfolios, and that it should now be considered as a separate, standalone allocation – one which dovetails nicely with a broad EM exposure which excludes the country. The new Lyxor MSCI Emerging Markets Ex China UCITS ETF provides exposure to 25 emerging equity markets, including Brazil, South Korea and India, but excluding China. Investors can then invest in China separately with single-country ETFs, allowing for more precision in portfolio weighting.

Chanchal Samadder, Head of Equities at Lyxor ETF, says: “This new ETF allows investors to gain a broad exposure to some of the world’s most dynamic developing countries and, at the same time, make their own independent allocations to China. We’re proud to be the first to bring this exposure to the European ETF market, as we firmly believe it will become an important strategic benchmark for clients.”

With this new launch, investors now have a complete toolkit with which to manage their EM and China allocation. Lyxor’s range includes the lowest cost MSCI China ETF in Europe with an annual management fee of 0.30 per cent for broad market access, a unique MSCI China A ETF which already includes A-Share mid-caps ahead of MSCI’s inclusion timeline, and a 12-year old China Enterprise (HSCEI) ETF offering exposure to H-Shares.

The new Lyxor MSCI Emerging Markets Ex China UCITS ETF is synthetically replicated and has an annual management fee (or Total Expense Ratio) of 0.30 per cent. It has been listed in EUR on Deutsche Boerse (Xetra) and in USD on the London Stock Exchange.

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