AXA Investment Managers (AXA IM) has introduced its first passive ETF in Europe with the launch of a fund providing low-cost access to the Nasdaq 100.
AXA IM’s low-cost Nasdaq 100 ETF undercuts its closest rival by six basis points.
The AXA IM Nasdaq 100 UCITS ETF (ANAU GY) has been listed on Deutsche Börse Xetra in US dollars.
The Nasdaq 100 consists of 100 of the largest US and international non-financial companies by market capitalization listed on Nasdaq, subject to various diversification requirements.
The index includes companies across major industry groups including computer hardware and software, communications, retail/wholesale trade, and biotechnology.
The Nasdaq 100 slumped 30.9% between the beginning of the year and the end of October as investors dumped tech stocks in response to the Federal Reserve aggressively increasing interest rates in a bid to tame rampant inflation.
The index has rallied somewhat in November, however, as investors see the Fed beginning to slow down its tightening cycle and economists predict that any recession in the US and Europe in early 2023 will not be as bad as previously feared.
Reflecting the Nasdaq 100’s popularity as the world’s most pre-eminent growth index, several ETF issuers in Europe already offer products tracking the index, some of which house many billions of dollars in assets under management.
The largest ETFs in the space include the $7.0bn iShares Nasdaq 100 UCITS ETF (CNDX LN) and the $5.5bn Invesco EQQQ Nasdaq 100 UCITS ETF (EQQQ LN) which come with expense ratios of 0.33% and 0.30%, respectively.
AXA IM has positioned its ETF to compete on price, however, with ANAU having an expense ratio of just 0.14%, cheaper than any other Nasdaq 100 ETF in Europe. Its closest competitors are the $130 million Xtrackers Nasdaq 100 UCITS ETF (XNAS LN) and the $100m Invesco Nasdaq 100 Swap UCITS ETF (EQQS LN), both of which have expense ratios of 0.20%.
The launch marks a notable change for AXA IM as the French asset manager had previously indicated its ETF platform would focus on actively managed socially responsible funds that directly promote UN Sustainable Development Goals.
AXA IM made its ETF debut in September by launching a global equity fund targeting firms supporting biodiversity efforts. The firm’s second ETF launch took place in October with the introduction of another global equity fund targeting companies making a positive contribution to reducing climate change.