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VTB Capital Investments launches European equity ETF on Moscow Exchange


VTB Capital Investments has launched the VTB European Equity Fund (VTBL ETF) on the Moscow Exchange. 

The firm writes that the instrument makes it possible to invest in a diversified portfolio of shares of the largest European companies, even with minimal investment amounts, with the share price at placement of EUR10.

“Diversification is now becoming increasingly important for retail investors, we are looking to develop our line of funds based on demand and are constantly adding new relevant opportunities. The new fund is a quality tool for passive investors who want to invest in shares of European companies and receive potential income in euros. It allows investors to diversify their portfolio even with small amounts of investments,” says Vladimir Potapov, Chief Executive Officer of VTB Capital Investments, Senior Vice President of VTB.

The maximum size of the fund’s commissions is 0.89 per cent per annum. VTB Bank broker’s commission for share purchase and sale transactions is 0 per cent. All operations are available in the VTB My Investments mobile application. Orders to buy and sell units at the market price are executed instantly, and investors can count on an investment tax deduction when owning fund units for more than three years, the firm says.

According to experts from VTB Capital Investments, European stocks look more attractive than American stocks today. The Euro STOXX 50 index is priced lower than the American one – the P/E multiple for the next 24 months is 14.2x versus 18.9x for the S&P 500. The spread between the multiples of the two indices reached its maximum values over the past three years. 

At the same time, the firm writes that their dynamics do not reflect success in the fight against coronavirus and the speed of tightening monetary policy: the fourth wave of the epidemic has begun in the United States, while Europe is more successfully passing a new wave of morbidity. In addition, the ECB is looser than the US Fed and will move on to tightening later this year as inflation in Europe is lower than in the US.

“The US authorities have provided direct fiscal stimulus payments of USD7 trillion (10 per cent of 2020 GDP) and are limited in the further expansion of fiscal stimulus. In Europe, stimulus volumes were launched later at the end of 2020, they are smaller in volume, but extended in time, this will allow you to feel the effect of the measures taken in 2022. This will lead to higher consumption growth rates in Europe, which will also be supported by the growth of tourist flow to Europe in 2022. We consider investment in European shares attractive, and the new fund is an interesting opportunity for retail investors to quickly and conveniently invest in this idea,” says Vadim Bit-Avragim, fund manager at VTB – European Companies Equity Fund.

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