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The Irish Stock Exchange (ISE) has licensed its benchmark ISEQ 20 Index to Northern Trust Global Investments (NTGI), the asset management arm of Northern Trust, to create a major new Exchange Traded Fund (ETF) in the United States of America (U.S.). The NETS™ ISEQ 20™ Index Fund (Ireland), which tracks the performance of the 20 Irish securities included in the ISEQ 20 Index, commenced trading today on the New York Stock Exchange.
The new ETF is the latest in a suite of products that are being launched by Northern Trust under the brand NETS™ (Northern Exchange Traded Shares), marking its entry into the ETF business. This suite is designed to facilitate investment exposure for U.S. investors to some of the world’s most widely recognised international equity benchmarks, including the ISEQ 20 Index, via ETFs traded on U.S. exchanges.
Brian Healy, Director of Traded Markets, Development, Operations at the ISE said: “We have long been advocates of ETFs – as very efficient, cost-effective securities traded on-exchange they are good for investors, they benefit the Irish issuers in the ISEQ 20 Index and they raise the profile and brand recognition of our ISEQ indices generally. The creation of the NETS™ ISEQ 20™ will facilitate easily accessible investment exposure to Irish equities for U.S. institutional and retail investors especially the very large Irish-American community.”
Peter K. Ewing, Head of NTGI’s ETF business, said: “The NETS™ product line would not be complete without an ETF that is based on the ISEQ 20 Index. The Irish economy has flourished in recent years, and its market can be an important source of diversification for U.S. investors. These facts are at the heart of our partnership with the Irish Stock Exchange.”
ETFs continue to grow at an extremely rapid rate globally both in terms of assets under management (AUM) and in the number of ETFs available to investors. Morgan Stanley, in its most recent global review of the ETF marketplace, now estimates that global AUM is in excess of $800 billion constituting an increase of 21% over the past year. It also estimates that the total number of ETFs globally grew by 42% over the same period with 1,302 on the market at the end of April 2008. It has also estimated that global AUM will exceed $2 trillion in 2011.
Brian Healy added: “The new Irish focused ETF has the potential to generate significant levels of AUM and provides increased profile and visibility for the ISEQ 20 Index in the critically important North American market. It also enhances the ISE’s ETF credentials and will help to raise awareness levels of ETFs domestically.”
