Lyxor cross-lists MSCI Malaysia ETF on LSE

Jul 2nd, 2018 | By | Category: Equities

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Lyxor has cross-listed the Lyxor MSCI Malaysia UCITS ETF on London Stock Exchange.

Malaysia equity ETFs

The Lyxor MSCI Malaysia UCITS ETF covers approximately 85% of the Malaysian equity market.

The fund tracks the MSCI Malaysia Index, capturing the performance of the large and mid-cap segments of the Malaysian market.

With 47 constituents, the index covers about 85% of the Malaysian equity universe.

The ETF uses a synthetic, swap-based replication process to track the index.

Financials contributes the largest sector exposure, accounting for approximately a third of the total weight, followed by consumer staples (13.0%), utilities (12.4%), industrials (9.3%), and telecommunication services (8.0%).

There is notable idiosyncratic, stock-specific risk in the index with the five largest constituents making up nearly 40% of total weight. These include Public Bank (13.8%), Tenaga Nasional (9.2%), Malayan Banking (6.9%), CIMB Group (5.1%), and Petronas Chemicals (4.1%).

Malaysia has outperformed the broader emerging markets universe year-to-date (as of the end of June), with the MSCI Malaysia Index down 3.9% compared to a fall of 6.7% for the MSCI Emerging Markets Index.

Over the longer term, however, Malaysian equities have underperformed, returning 8.0% per annum since December 2000, compared to 9.5% per annum for the MSCI Emerging Markets Index.

MSCI Malaysia Index performance

Source: MSCI.

Launched on Euronext Paris in March 2008 under the ticker MAL FP, the ETF was cross-listed to Deutsche Börse (LYXMAL GY) and Borsa Italiana (MAL IM) later that same year. Each of the three listings trade in euros, while the new listings on London Stock Exchange trade in US dollars (MALU LN) or pound sterling (MALX LN).

Across all listings, the fund has approximately $35 million in assets under management. Its total expense ratio (TER) is 0.65%.

Investors may also achieve pure-play access to Malaysian equities through ETFs offered by DWS or HSBC, both of which also track MSCI indices.

The Xtrackers MSCI Malaysia Index UCITS ETF (XCS3 LN) offers the cheapest vehicle of the three with a TER of 0.50%. Its AUM is approximately $24m. The HSBC MSCI Malaysia UCITS ETF (HMYD LN) charges 0.60% and has just $5m in AUM.

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