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Lyxor cranks up the ETF price war with a 0.04% TER launch

Lyxor cranks up the ETF price war with a 0.04% TER launch

Lyxor has upped the ante in the exchange-traded fund (ETF) pricing war, launching a range of products that it claims are among the cheapest in Europe.

Two of the four new funds being launched will have a Total Expense Ratio (TER) of 0.04%.

The ETFs cover US, UK, Japan and global equities, and will be listed on the London Stock Exchange on 22 March.

·         Lyxor Core Morningstar UK NT (DR) UCITS ETF 0.04%

·         Lyxor Core Morningstar US Equity (DR) UCITS ETF 0.04%

·         Lyxor Core MSCI Japan (DR) UCITS ETF 0.12%

·         Lyxor Core MSCI World (DR) UCITS ETF 0.12%

Arnaud Llinas, head of ETFs and indexing at Lyxor: ‘Investors tell us they want simple, high-quality ETFs at low costs. We have launched our core range to achieve precisely that – cornerstone investments for any portfolio.’

James McManus, investment manager at Nutmeg, said: ‘This type of product innovation is exactly what the ETF industry needs: offering investors a lower cost option without compromising on quality.  Lowering costs means investors keep more of their returns and Lyxor are leading the way.’

ETF pricing has come down sharply on major market products in recent years.

In October, State Street Global Advisors (SSGA) cut fees on 15 of its exchange-traded funds (ETF) to the ultra-low level of 0.03%. 

Lyxor's 0.04% TER on the two ETFs compares to 0.07% on the iShares FTSE 100 ETF, after it slashed its charges in 2015 after vanguard dropped to the same fee in 2014.  

While Vanguard, which is the second largest ETF provider in the world after BlackRock’s iShares, offers an S&P 500 product carrying an annual fee of 0.04%.

 

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