Two exchange-traded funds are due to be launched referenced to the Frankfurt-based International Index Company’s (IIC’s) series of European credit default swap indexes.The IIC has granted licenses to construct ETFs based on the indexes to Deutsche Bank and EasyETF, a joint venture run by BNP Paribas and Axa Investment Managers (Axa IM). The funds are intended to broaden access to the growing European credit derivatives market and will look to capitalise on interest from less traditional credit derivatives investors. Both Deutsche Bank and EasyETF pointed to insurance companies, asset managers and corporates as potential investors in the funds.
The Deutsche Bank products will be based on the iTraxx Europe, Crossover and HiVol indexes and listed on the London Stock Exchange, Euronext Paris, Deutsche Börse and Borsa Italiana. Meanwhile, the EasyETF products will comprise an iTraxx Europe fund run by BNP Paribas Asset Managers, and iTraxx HiVol and Crossover ETFs to be managed by Axa IM. They will be listed on Euronext Paris and Deutsche Börse.
Deutsche Bank anticipates regulatory approval for its funds by June, while BNP Paribas predicted its funds would trade from the third quarter of 2007.
More ETFs based on the IIC’s indexes may soon follow, as many other banks are understood to have approached it in pursuit of similar licenses.
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