iShares, the exchange-traded funds offering of BlackRock, has listed its iShares Euro Stoxx 50 ex-Financials Undertakings for Collective Investment in Transferable Securities (UCITS) exchange-traded fund (ETF), or EXFN, on the Amsterdam market of Euronext.
The fund is the first ETF to come to market in continental Europe using an international security structure, where settlement of transactions is exclusively at Euroclear Bank – the Brussels-based international central securities depository (ICSD).
Previously, cross-border transactions in ETFs settled in multiple national central securities depositories (CSDs) with related re-alignment costs and risks. With this new international security structure, the iShares ETF will be issued and settled for the first time in an International CSD (ICSDs) – in this instance Euroclear Bank, facilitating better cross-border liquidity provision and in parallel reducing operational and trading costs for ETF investment, potentially resulting in growth of the European ETF market.
The newly listed iShares EURO STOXX 50 ex-Financials UCITS ETF is a physically replicating fund which invests in blue chip stocks from 12 eurozone countries, while excluding companies from the financial sector, potentially providing investors with a less volatile exposure to eurozone equities. The fund has a total expense ratio of 20 basis points.
“We are very proud to be chosen by iShares as the first exchange in continental Europe to list this innovative international ETF structure exclusively on the newly created ETF Euroclear Bank settlement segment,” said Pedro Fernandes, head of European exchange traded products of Euronext.
“Adapting the market infrastructure to reflect the pan-European profile of ETFs should provide further operational efficiencies to issuers and liquidity providers, but more importantly improve on-exchange spreads and market depth available to end-investors.”
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