Landsbref lists Iceland’s first ETF since 2004

Aug 20th, 2013 | By | Category: Equities

Icelandic fund management company Landsbref, a subsidiary of state-owned Landsbankinn, has listed a new exchange-traded fund (ETF) on the Nasdaq OMX Iceland.

The fund, known simply as Landsbref Equity ETF (LEQ), is the first ETF to be issued on the Icelandic exchange since 2004 and the only one to be based on the Icelandic market.

Landsbref lists Iceland’s first ETF since 2004

Sigthor Jonsson, CEO of Landsbréf.

The fund is linked to the OMX Iceland 6 Cap Index, an index consisting of the six most actively traded shares on the Nasdaq OMX Iceland exchange. The limited number of constituents in the index ensures that all the underlying shares have sufficient liquidity.

The composition of the index is revised twice a year, with constituents weighted by capped free float-adjusted market capitalisation.

Constituents currently include shipping company Eimskipafélag Íslands, retailer Hagar, airline Icelandair Group, food processing manufacturer Marel, and insurers Tryggingamiðstöðin and Vátryggingafélag Íslands. At the sector level, consumer services companies comprise 33.49%, financials 16.88% and industrials 49.62%.

Magnus Hardarson, Vice-President Nasdaq OMX Iceland, commented: “The new LEQ exchange-traded fund from Landsbréf is a welcome addition to our product offering on the Icelandic market. In our rebuilding of the Icelandic market we have experienced a great increase in equity trading, and this new issuance of an ETF will certainly support the growth potential of the equity market.”

Sigthor Jonsson, CEO of Landsbréf, added: “We are delighted to lead the come back of exchange-traded funds on the Icelandic market with the new LEQ fund. The new LEQ ETF is a suitable trading product for investors who want to have an easy access to the most traded companies on the Icelandic market at low cost. It is our hope that the fund will be welcomed by investors in Iceland as well as abroad.”

Landsbref has revealed plans to launch further ETFs in the coming months, including a suite of bond ETFs.

Company parent Landsbankinn, which was established following the restructuring of failed bank Landsbanki, perhaps best known for its controversial Icesave online savings operation, will provide liquidity to the new ETF via market making functions.

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