On 1 February 2002, Crdit Lyonnais Asset Management will introduce two new Exchange Traded Funds (or ETFs) under the brand name SPDR Europe. Both the SPDR Europe 350 and SPDR Euro funds will trade on NextTrack, the dedicated ETF platform at Euronext (Paris).
As part of the world’s biggest family of ETFs – all based on indices developed by Standard & Poor’s – these two new SPDRs (Standard & Poor’s Depository Receipts) will provide investors with access to low-cost exposure to Europe’s growing equity markets. SPDR Europe 350 and SPDR Euro respectively track the S&P Europe 350 and the S&P Euro indices. These indices are the European counterparts of the widely-followed S&P 500 in the United States.
The S&P Europe 350 and S&P Euro indices stand out for their broad market representation, covering approximately 70% of the underlying capitalization of their respective equity markets. SPDR Europe 350 and SPDR Euro are listed instruments that provide investment diversification opportunities by mirroring their underlying indices without inducing substantial geographical or sector style biases.
Registered in Ireland as coordinated open-ended investment vehicles, SPDR Europe funds target broad, pan-European distribution. SPDR Europe 350 and SPDR Euro have been registered for sale by the Commission des Oprations de Bourse (COB) in France, and are scheduled to begin the registration process in most European Union countries.
With low total management fees of 0.35% per annum, these two new SPDRs are attractively priced for both institutional and private investors. Institutional investors will primarily use SPDR Europe 350 and SPDR Euro to adjust their portfolio exposure, to implement arbitrage strategies or to take short-term market positions. Private investors will benefit from institutional standards for long-term investing or active market trading.
As per the terms of the partnership announced 3 October 2001, Crdit Lyonnais Asset Management retains full rights in Europe to create, list and promote SPDRs that track the S&P Europe 350 and all sub-component indices. As the Investment Manager and Listing Agent, Crdit Lyonnais Asset Management plans to roll out a complete range of European SPDRs dedicated to portfolio management, including sector, geographical and style indices of the S&P Europe 350.
With the ambition of replicating the success of the U.S. SPDR, SPDR Europe 350 and SPDR Euro leverage the brand’s strong recognition and reputation. The introduction of the two ETFs brings together a group of global industry leaders – Crdit Lyonnais and Merrill Lynch as designated Market Makers, Morgan Stanley as market participant and The Bank of New York as Administrator and Custodian – who were selected for their quality of service and for their ability to exercise the vast market potential for SPDR Europe funds.
SPDR Europe funds follow in the wake of the U.S. SPDR whose introduction in 1993 was at the forefront of the worldwide ETF market. As of January 2002, eleven current SPDR products manage $38 billion in assets, representing 35% of worldwide ETF assets.