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This new type of security offers a low-cost entry to the Irish stock market with a total expense ratio of 0.5% based on the assets under management in the ETF. This total expense ratio includes all management and service provider fees as well as all operating expenses of the ETF. This level of cost is significantly lower than the fees and bid/offer spreads typically charged by managed funds and other index-tracking products in the Irish market. The only additional costs that an investor will have to pay are the normal commissions charged by the stockbroker or intermediary involved in the transaction.
ETFs provide investors with an exposure to a more diversified portfolio of a given security type in one single transaction. The investment objective of the ISEQ® 20 ETF is to invest in a portfolio of 20 of the most liquid and largest stocks included in the ISEQ® 20 Index. The ISEQ® 20 ETF may hold up to 20% of its net asset value in a single security and the composition of the fund may be adjusted from time to time to reflect any changes in the underlying index.
NCB is the promoter and manager of the ISEQ® 20 ETF. The Chairman of the ISEQ® 20 ETF is Mr. Maurice O’Connell, the former Governor of the Central Bank of Ireland.
The ISEQ® 20 ETF is listed and traded on the Irish Stock Exchange in the same manner as other stocks on the Official List of the Exchange and liquidity in the ETF will be enhanced further by the presence of a dedicated market-maker which will provide a continuous bid/offer price during market trading hours. The ETF can be bought or sold through any stockbroking member of the Exchange.
Susquehanna International Securities Limited is the dedicated market maker for the ISEQ® 20 ETF.
The ISEQ® 20 ETF will differ from index tracking products based on the Irish market in that it can be bought and sold on an intra-day basis whereas other tracker products are generally priced on an end-of-day basis. The market in this security will also offer high levels of transparency with transaction prices, trading volumes and the depth of buy and sell orders being published real time by the Exchange thus providing clear and timely visibility on what is happening in the market for the ETF. This information will be published through the Exchange’s full range of information vendors such as Reuters, Bloomberg, Thomson Financial in the same manner as trading in any other share. Market data on the ETF will be available on www.ise.ie.
Commenting on the launch of the ISEQ® 20 ETF, Tom Healy, Chief Executive of the Irish Stock Exchange said: “The launch of the market for exchange traded funds by the Irish Stock Exchange provides a new and cost effective means of accessing the Irish equity market for both retail and institutional investors who want to achieve a diversified exposure to leading Irish stocks. It means that they will now be able to invest via a single security in a broad range of Irish equities at very low cost and with the knowledge that there will be a fully transparent and liquid market for their investment.”
He added that “The feedback we have received from institutional investors, stockbrokers and investment banks is that there is a clear demand for an ETF based on the Irish market and we are confident that the ISEQ® 20 ETF with its cost effectiveness, transparency and simplicity will meet this demand.”
