An exchange-traded fund (ETF) that will track European banks has been launched by Lyxor.
The ETF will replicate the EURO STOXX Banks index, which currently contains 28 institutions including the Bank of Ireland, Deutsche Bank and UniCredit. Over the past year the index has risen by 15%, but is still 70% below its 2007 peak.
Lyxor argued that the sector would continue to re-rate in the months ahead. ‘Structural improvements in the eurozone such as an end to external deficits, a much better balance between fiscal tightness and accelerating structural reforms make eurozone financial assets particularly attractive,’ the firm stated.
It added that accommodative policy from the European Central Bank and increased certainty over the Asset Quality Review would also buoy the banking industry.
The ETF’s annual management charge will be 0.3%.