Lyxor introduces EUR-hedging for MSCI World ETF on Borsa Italiana

Jan 9th, 2020 | By | Category: Equities

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Lyxor has rolled out a euro-hedged share for its Lyxor MSCI World UCITS ETF on Borsa Italiana.

Lyxor introduces EUR-hedging for MSCI World ETF on Borsa Italiana

The new share class hedges currency exposure relative to the euro on a monthly basis.

The fund is linked to the well-known MSCI World Index which covers large- and mid-cap representation across 23 developed market countries.

With over 1,600 constituents, the index represents roughly 85% of the entire developed market equity universe.

Stocks are weighted by float-adjusted market capitalization within the index. Nearly two-thirds (63.3%) of the index’s exposure is dedicated to stocks from the US with the next largest country exposures being Japan (8.2%), the UK (5.5%), France (3.8%) and Canada (3.4%).

The largest sector exposures are to information technology (17.4%), financials (15.7%), healthcare (13.0%), industrials (11.0%), and consumer discretionary (10.3%).

The MSCI World is often considered as the bedrock of a large international portfolio. Many investors use it as a core building block around which to build satellite tilts with sector or regional exposures or blend it with global or regional bond allocations in a diversified portfolio.

The new share class (WLDH IM) hedges foreign currency risk relative to the euro on a monthly basis. Dividends are distributed to investors on a semi-annual basis.

The fund is available in unhedged share classes across most major exchanges in Europe (LSE, Euronext Paris, Xetra, Borsa Italiana, and SIX) as well as with US dollar hedging on LSE and BX Swiss.

The ETF comes with an expense ratio of 0.30% and houses some $3.9 billion in assets under management across all share classes.

Interestingly, Lyxor offers a ‘Core’ ETF which also tracks the MSCI World Index but costs just 0.12%. It is available in unhedged share classes on LSE, Euronext Paris, Xetra, Borsa Italiana, and BX Swiss and collectively houses around $500m.

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