More Exchange Traded Products On Oslo Børs

ETFs (Exchange Traded Funds) and ETNs (Exchange Traded Notes) are traded on the stock exchange and offer the opportunity of exposure to shares, indices or commodities just as easily as you buy and sell shares. The products are often geared, and are rebalanced daily. Products that use gearing are best suited for investors with a short-term perspective. ETPs represent a category of products that is growing very strongly internationally. On Oslo Børs, there are already six listed ETFs and 28 listed ETNs. Liquidity in these products is growing very quickly, and turnover for these listed ETPs in the third quarter totalled around NOK 15.9 billion for the ETFs and around NOK 1.2 billion for the ETNs. Prior to October 2010, ETNs were known on Oslo Børs as financial certificates. In practice, the issuer of such a product is involved in quoting prices and ensuring order book volume (market making), and this means that investors are assured of a degree of liquidity. Oslo Børs expects to see continuing growth for both ETFs and ETNs.

ETFs

An ETF (exchange traded fund) is a fund that is listed on the stock exchange that typically offers the opportunity for buyers of units in the fund to gain exposure to an underlying index. It is also possible for an ETF to be linked to some other asset class such as individual shares or commodities, or to a basket of investments in an underlying asset class. The level of risk exposure will vary between ETFs depending on the asset class to which an ETF is linked and the degree of gearing (borrowing). Management costs for ETFs are usually lower than for traditional mutual funds. Handelsbanken and DnB NOR have issued three ETFs, all of which are based on the OBX Index for Oslo Børs.

ETNs

An ETN is a security that tracks an underlying index, commodity or currency, or alternatively a basket of such underlying asset classes. In other words, ETNs are derivatives, but differ from standardised derivatives issued by the stock exchange in that they are issued by financial institutions such as banks and investment firms. ETNs can be bought and sold on the stock exchange just as easily as buying or selling shares. At the moment, the ETNs that are listed on Oslo Børs have been issued by Handelsbanken and DnB NOR. An ETN can be issued as a simple product where the performance of the underlying asset determines the return generated by the ETN. Alternatively, an ETN can be issued as a bull or bear product with gearing, so that the return generated by the ETN is greater than the return on the underlying instrument.

ETNs are currently available for a number of the largest companies listed on Oslo Børs and also for a number of commodities such as aluminium, oil, gold and copper. In addition, ETNs are offered for a number of the Oslo Børs indices, and a new oil service index has been established which includes the 10 largest oil service companies listed on Oslo Børs.

Click here for more information on ETPs: http://www.oslobors.no/ob_eng/Oslo-Boers/Listing/Listing-of-ETPs

Click here for a list of ETFs: http://www.oslobors.no/ob_eng/markedsaktivitet/etfList?newt__menuCtx=1.10.1

Click here for a list of ETNs: http://www.oslobors.no/ob_eng/markedsaktivitet/etnList?newt__menuCtx=1.10.2