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

Lyxor has launched 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% 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: “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% 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.1)

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%. It has been listed in EUR on Deutsche Boerse (Xetra) and in USD on the London Stock Exchange.

1) Source: Lyxor International Asset Management, as at 19thJune 2019. Statements about Lyxor’s credentials vs. peers refer to the European UCITS ETF market only.

Notes to editors:

LinkedIn

Twitter

Media Contact:
Claire Thibeau
Tel: +33 1 42 13 84 88

Email: claire.thibeau@lyxor.com

Key risks:

CAPITAL AT RISK: ETFs are tracking instruments: Their risk profile is similar to a direct investment in the Underlying Index. Investors' capital is fully at risk and investors may not get back the amount originally invested.

REPLICATION RISK: The fund objectives might not be reached due to unexpected events on the underlying markets which will impact the index calculation and the efficient fund replication.

COUNTERPARTY RISK: With synthetic ETFs, investors are exposed to risks resulting from the use of an OTC swap with Société Générale. In-line with UCITs guidelines, the exposure to Société Générale cannot exceed 10% of the total fund assets. Physically replicated ETFs may have counterparty risk if they use a securities lending programme.

UNDERLYING RISK: The Underlying index of a Lyxor ETF may be complex and volatile. For example, when investing in commodities, the Underlying index is calculated with reference to commodity futures contracts exposing the investor to a liquidity risk linked to costs such as cost of carry and transportation. ETFs exposed to Emerging Markets carry a greater risk of potential loss than investment in Developed Markets as they are exposed to a wide range of unpredictable Emerging Market risks.

CURRENCY RISK: ETFs may be exposed to currency risk if the ETF is denominated in a currency different to that of the Underlying Index they are tracking. This means that exchange rate fluctuations could have a negative or positive effect on returns.

LIQUIDITY RISK: Liquidity is provided by registered market-makers on the respective stock exchange where the ETF is listed, including Societe Generale. On-exchange liquidity may be limited as a result of a suspension in the underlying market represented by the Underlying Index tracked by the ETF; a failure in the systems of one of the relevant stock exchanges, Societe Generale or other market- maker systems; or an abnormal trading situation or event.

It is important for potential investors to evaluate the risks described above and in the fund prospectus which can be found on www.lyxoretf.com

Lyxor Asset Management Group ("the Lyxor group"), wholly-owned directly or indirectly by Societe Generale and composed notably of two subsidiaries (1) (2), is a European asset management specialist, an expert in all investment styles, active, passive or alternative. From ETFs to multi-management, with EUR 137.9 billion* under management and advisory, Lyxor group creates innovative investment solutions to meet the long-term challenges of managing savings. Thanks to its experts and its engineering tradition and research, Lyxor group combines search for performance and risk management.

(1) Lyxor Asset Management S.A.S. is approved by the «Autorité des marchés financiers» (French regulator) under the agreement # GP98019.

(2) Lyxor International Asset Management S.A.S. is approved by the «Autorité des Marchés Financiers» (French regulator) under the agreement # GP04024.

*Including EUR 16.1bn assets under advisory as at end April 2019.

Lyxor International Asset Management : ETF Pioneers since 2001

Lyxor has been running ETFs since 2001, longer than any other European provider. Our pioneering spirit helped shape the market as you know it today. Over the last 18 years, we’ve become one of Europe’s three largest1 ETF managers. And we’ve built one of its most far-reaching ranges, which spans all asset classes, and includes some of the lowest cost, largest, and best performing ETFs.1)

We now offer more than 220 ways to explore the markets. So, whether investors are seeking essential, low cost core index exposure, or reaching out for more tactical opportunities in specific sectors or markets, we have a product to match their needs. Staying true to our pioneering heritage, we continue to expand the frontiers of fixed income ETFs where we rank number 3 in Europe, and develop new solutions for ESG, Smart Beta or income investors.1)

Our aim from the start has been to create ETFs of the highest calibre that can be trusted in any market. In 2011 we introduced our ETF Quality Charter to ensure that every one of our 220+ funds meets the same exacting standards for tracking precision, product liquidity, risk management and transparency.

1) Source: Lyxor International Asset Management, as at 31/05/2019. Lyxor ETF AUM totalled €60.2bn as at 31/05/2019. Past performance is not a reliable indicator of future results.

Important information

Except for the United-Kingdom, where the document is issued in the UK by Lyxor Asset Management UK LLP, which is authorized and regulated by the Financial Conduct Authority in the UK under Registration Number 435658, this document is issued by Lyxor International Asset Management (LIAM), a French management company authorized by the Autorité des marchés financiers and placed under the regulations of the UCITS (2014/91/EU) and AIFM (2011/61/EU) Directives. Société Générale is a French credit institution (bank) authorised by the Autorité de contrôle prudentiel et de résolution (the French Prudential Control Authority).

Some of the funds described in this brochure are investment companies with Variable Capital (SICAV) incorporated under Luxembourg Law, listed on the official list of Undertakings for Collective Investment, authorised under Part I of the Luxembourg Law of 17th December 2010 (the “2010 Law”) on Undertakings for Collective Investment in accordance with provisions of the Directive 2009/65/EC (the “2009 Directive”) and subject to the supervision of the Commission de Surveillance du Secteur Financier (CSSF).

These funds are sub-fund of either Multi Units Luxembourg or Lyxor Index Fund and have been approved by the CSSF. Alternatively, some of the funds described in this document are sub-funds of Multi Units France a French SICAV incorporated under the French Law and approved by the French Autorité des marches financiers. Each fund complies with the UCITS Directive (2009/65/CE), and has been approved by the French Autorité des marches financiers.

Société Générale and Lyxor AM recommend that investors read carefully the “risk factors” section of the product’s prospectus and Key Investor Information Document (KIID). The prospectus and the KIID are available in French on the website of the AMF (www.amffrance.org). The prospectus in English and the KIID in the relevant local language (for all the countries referred to, in this document as a country in which a public offer of the product is authorised) are avilable free of charge on lyxoretf.com or upon request to client-services-etf@lyxor.com

The products are the object of market-making contracts, the purpose of which is to ensure the liquidity of the products on NYSE Euronext Paris, Deutsche Boerse (Xetra) and the London Stock Exchange, assuming normal market conditions and normally functioning computer systems. Units of a specific UCITS ETF managed by an asset manager and purchased on the secondary market cannot usually be sold directly back to the asset manager itself. Investors must buy and sell units on a secondary market with assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current net asset value when buying units and may receive less than the current net asset value when selling them. Updated composition of the product’s investment portfolio is available on www.lyxoretf.com. In addition, the indicative net asset value is published on the Reuters and Bloomberg pages of the product, and might also be mentioned on the websites of the stock exchanges where the product is listed.
Prior to investing in the product, investors should seek independent financial, tax, accounting and legal advice. It is each investor’s responsibility to ascertain that it is authorised to subscribe, or invest into this product. This document together with the prospectus and/or more generally any information or documents with respect to or in connection with the Fund does not constitute an offer for sale or solicitation of an offer for sale in any jurisdiction (i) in which such offer or solicitation is not authorized, (ii) in which the person making such offer or solicitation is not qualified to do so, or (iii) to any person to whom it is unlawful to make such offer or solicitation. In addition, the shares are not registered under the U.S Securities Act of 1933 and may not be directly or indirectly offered or sold in the United States (including its territories or possessions) or to or for the benefit of a U.S Person (being a “United State Person” within the meaning of Regulation S under the Securities Act of 1933 of the United States, as amended, and/or any person not included in the definition of “Non-United States Person” within the meaning of Section 4.7 (a) (1) (iv) of the rules of the U.S. Commodity Futures Trading Commission). No U.S federal or state securities commission has reviewed or approved this document and more generally any documents with respect to or in connection with the fund. Any representation to the contrary is a criminal offence. This document is of a commercial nature and not of a regulatory nature. This document does not constitute an offer, or an invitation to make an offer, from Société Générale, Lyxor Asset Management (together with its affiliates, Lyxor AM) or any of their respective subsidiaries to purchase or sell the product referred to herein. These funds include a risk of capital loss. The redemption value of this fund may be less than the amount initially invested. The value of this fund can go down as well as up and the return upon the investment will therefore necessarily be variable. In a worst case scenario, investors could sustain the loss of their entire investment.

This document is confidential and may be neither communicated to any third party (with the exception of external advisors on the condition that they themselves respect this confidentiality undertaking) nor copied in whole or in part, without the prior written consent of Lyxor AM or Société Générale. The obtaining of the tax advantages or treatments defined in this document (as the case may be) depends on each investor’s particular tax status, the jurisdiction from which it invests as well as applicable laws. This tax treatment can be modified at any time. We recommend to investors who wish to obtain further information on their tax status that they seek assistance from their tax advisor. The attention of the investor is drawn to the fact that the net asset value stated in this document (as the case may be) cannot be used as a basis for subscriptions and/or redemptions. The market information displayed in this document is based on data at a given moment and may change from time to time.