FAQ

The convenience of a mutual fund combined with the transparency of a single security tradeable on exchanges.

Save time & money. ETFs are a very good solution in terms of both ease of use and costs. It is more advantageous to use ETFs than to invest directly in all the underlying securities of an index in order to implement asset management. Investors enjoy the convenience of delegated management, since the management company is in charge of index adjustments. With ETFs, investors can avoid re-weighting their portfolio over a limited period, and therefore can limit the potential problems linked to the liquidity of certain securities. Delegated management helps investors to devote their time and energy into other investments aiming to outperform the index: stocks over-weightings, options, etc. Tracking error close to zero. ETFs have specifically been designed to track market indices. With Lyxor ETFs, investors get the market performance. Lyxor ETFs closely replicate their benchmark index. The tracking error is close to zero and correlation is over 99.99%. Investors can receive annual dividends from ETFs based on the stock index.

Continuous trading. Each ETF closely tracks the index it refers to, enabling investors to benefit from the performance of the index as easily as if they had bought a single stock. It thus provides instant exposure to a basket of securities through a single investment tool, which is quoted continuously during local trading hours. Like market-listed securities, ETFs can be bought and sold at a quoted price at any time during the local trading day. No minimum volume is required. High liquidity. Liquidity is provided by designated market makers who are committed to offering real time prices (bid/offer), small spreads (0.06% on the Lyxor ETF DJ Euro Stoxx 50 on average over 2005 - source: Euronext) and neutrality towards the asset manager and the index provider. The market price is always a fair price because any imperfections would be immediately arbitraged (ETFs against futures for instance).

Transparency. For each ETF operated by Lyxor AM, the asset management company discloses the perfect basket of the fund and the net asset value (NAV) for one unit every day on Reuters, Bloomberg and the Internet. Furthermore, stock exchanges publish intra-day information on the indicative net asset value (indicative NAV), enabling investors to stay up to date with the progress of their investment and make comparisons with the bid/offer on the market.

Cost efficient. ETFs enable investors to gain broad exposure to the entire market on a real time basis and at a lower cost than any other investment tools. ETFs have an all-in fee and no other costs are deducted from the fund. Lyxor ETF management fees (from 0.165% to 0.65% p.a. including taxes) are calculated daily on a proportional basis and deducted from the fund’s assets. No other fees are charged. Unlike traditional mutual funds, there are no front-end and back-end loads for market trading. Your financial intermediary will charge the same intermediation fees as for any other market security.