The FTSEurofirst 80 belongs to the FTSEurofirst range of pan-European indices jointly developed by FTSE and Euronext. Representing a basket of 80 euro-zone stocks, it combines all the features market participants are looking for, offering broader geographical coverage of the euro zone and sector representation that more accurately reflects the structure of the zone's economy. With the same aim, and in response to demand, the index is adaptable, since new stocks are to be added to the sample when other countries join the euro zone.
The FTSEurofirst 80 Master Unit is an investment fund open to all investors. No minimum subscription applies, while each unit represents approximately 1/100 of the index, i.e., EUR 31.12 at 23 September 2003. Individuals and institutions will thus be able to invest in all the euro zone's 80 leading stocks through a single transaction.
As with other ETF, no entry or withdrawal fees apply to market trading in the FTSEurofirst 80 Master Unit. Management fees are among the lowest on the market at 0.35% a year, including tax. The fund is also eligible for inclusion in personal equity plans (Plan d'Epargne Actions) offering tax benefits for French residents.
Liquidity-provider contracts (contrats d'animation) have been agreed on with a number of large institutions to ensure adequate liquidity on the secondary market. Société Générale and BNP Paribas have thus undertaken to offer a very narrow bid/ask spread throughout the trading day.
Lyxor AM, which accounts for a leading 73% share of the French ETF market (source Euronext -- August 2003) now has six funds (or Master Units) allowing for easy, low-cost investment in 300 leading stocks around the world.
The Commission des Opérations de Bourse granted its authorization n°03-825 for the admission of FTSEurofirst 80 Master Unit to the Premier Marché of Euronext Paris SA on 22 September 2003.
FTSEurofirst tradable European indices were launched jointly by Euronext and FTSE Group, the world leader in index development and management, on 29 April 2003. Combining liquidity and broad representation of the underlying market, they are the most effective tools to ease equity-market trading in the euro zone and across Europe. The range is made up of two indices: the FTSEurofirst 80 based on a basket of 80 stocks representing the euro zone in its current form, and the FTSEurofirst 100 based on a pan-European sample of 100 stocks denominated in two currencies, euros and sterling, to simplify trading in European shares. Futures and options on the two indices have been listed on Euronext.liffe, the Euronext derivatives market, since 23 June 2003.
Exchange traded funds or ETF, also referred to as trackers, are index-based funds traded on Euronext cash markets. Tracking index performance, they are as simple to trade as shares and, like shares, are continuously traded. They also offer the advantages of an investment fund, opening access to a wide range of stocks for broad diversification by geographical market and sector. Euronext's NextTrack segment, specializing in exchange traded funds, makes these funds more readily identifiable, helping investors select those representing the index or type of portfolio they are looking for.
