Europe takes to ETFs


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European Exchange traded funds are taking off - with more than e1 billion now invested. Crédit Lyonnais Asset Management and Barclays Global Investors each offer ETFs based on the S&P Europe 350, with funds respectively traded on Euronext and the American Stock Exchange.

The S&P Europe 350 is the only index offering exposure to European markets that trades as an ETF in both the US and Europe. It consists of 350 large caps from 17 European markets. The stocks are chosen from a universe of publicly traded European companies, covering roughly 70% of the market cap of the broader European market. Futures and options on the index are traded on the Spanish Derivatives Exchange and the Chicago Mercantile Exchange.

Mark Sinsheimer, executive vice president, Crédit Lyonnais AM, says there is an strong appetite for this sort of investing. "The success of the S&P Europe 350 Index demonstrates investors' preference for broad tradeable indices," he says.

At BGI, Lee Kranefuss, chief executive of its individual investor group, says the index gives investors coverage of European markets through a liquid basket of the most representative European companies. "The S&P Europe 350 is an excellent benchmark for European stock market performance and a way for investors to capture European equity exposure," he says.

Robert Shakotko, S&P's managing director of index services, says the e1 billion mark is a significant milestone and says the index offers the same level of market coverage, sector representation and investability as the S&P 500 in the US.