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Sunday, 14th April 2024
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ISE readies ISEQ 20 launch Back  
The first Irish Exchange Traded Fund (ETF), the ISEQ?20, looks set for a March launch, pending approval from the Irish Financial Services Regulatory Authority (IFSRA).
On March 7th, the Irish Stock Exchange (ISE) launched the index, which represents the 20 most liquid and largest capped equities listed, which the ETF will track. ETFs are index funds that are listed and traded on exchanges like stocks, and they allow investors to gain broad exposure to entire stock markets of different countries and specific sectors with relative ease on a real-time basis and at a lower cost than many other forms of investing.

With a base value of 1,000 on 31-Dec-2004, the index was valued at 994 at the end of its second day on March 8th. Based on historic data back as far as December 31st, 1997, there has been a growth of 99 per cent in the ISEQ? 20 price index, and a growth of 129 per cent in the ISEQ? 20 return index in the period from 1997 to 2004. Brian Healy, director of trading with the ISE, says that once the first ETF is launched, the Exchange is keen to attract more ETF products which will be tradable on the ISE. Potential products that could be available to Irish retail investors include a fund tracking sectoral indices in the US, and a developing market ETF, tracking for example a Chinese index. Bank of Ireland Asset Management is the ETF’s investment manager, NCB Investment Services is the fund manager, Investors Bankers Trust is acting as custodian/ administrator to the fund, and the market maker is Susquehanna International Securities.

The global ETF market has shown steady growth in the past number of years. According to statistics from Morgan Stanley, at the end of January 2005, there were 345 ETFs with assets of $306.5 billion, managed by 42 managers on 30 exchanges around the world. The US has the largest number of products and assets under management (AUM) - 154 ETFs and $224.1 billion, followed by Europe with 117 ETFs and $34.5 billion and Japan with 15 ETFs and $29.8 billion. For more on ETFs see page 11.

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