Lyxor Launches First Gold Miners ETF
By Rebecca Hampson | 10 January, 2013

Lyxor has launched a new exchange-traded fund based on MSCI’s gold miners index, which will be the first European fund of its kind. The Lyxor ETF MSCI ACWI Gold was listed on NYSE Euronext Paris this week.

The ETF will track the MSCI ACWI Gold with EM DR 18% Group Entity Capped Index, which provides exposure to gold stocks from developed and emerging markets.

The index comprises companies that generate revenue from gold or gold-related products. Companies are selected from the large- and mid-cap size segments across developed and emerging markets. For emerging markets companies only, depositary receipts are included. Constituent weights are capped in order to limit index concentration.

Claus Hein, head of institutional sales for the UK, Netherlands and the Nordic countries at Lyxor, said: “We developed the ETF following our own research and investor interest in this particular theme.

“For investors who like gold this gives them an alternative way to get exposure to the precious metal via a global portfolio of developed and emerging market equities. In addition, gold mining stocks have generally been lagging gold spot prices and, for investors who are optimistic about equities, this could be an interesting way to combine both themes within their broader asset allocation framework.”

“The structure of the ETF is the same as all Lyxor equity ETFs, which are fully UCITS compliant. However, it is the first of its kind on this particular index,” said Hein.

During recent phases of quantitative easing by the world’s central banks—QE1 and QE2—gold prices increased by 36% and 21%, respectively, according to data from Société Générale. But since 2008, gold mining stock prices have lagged the movement in the gold price, the bank says. An increase in gold prices, combined with a more favourable environment for equities, might lead to a recovery in gold miners’ equity prices, Société Générale argues.

Baer Pettit, managing director and head of the MSCI index business, said in a statement: “The licensing of this new index to Lyxor further extends that relationship, bringing the number of Lyxor ETFs based on MSCI indices to 49, more than any other index provider.”

The ETF is listed in both euros and US dollars and has a management fee of 0.50 percent per annum.

 

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