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7IM in move to Lyxor

7IM has replaced the iShares FTSE 100 exchange traded fund with the new lower-cost Lyxor ETF FTSE 100 in its multi-manager portfolios.

The company invests 25 per cent of its multi-manager portfolios in ETFs, which are a hybrid of shares and tracker funds. Like tracker funds, they passively track an index but can also be traded on a stock exchange like shares.

iShares FTSE 100 has a total expense ratio of 0.4 per cent while the TER on Lyxor ETF FTSE 100 is 0.1 per cent lower.

Lyxor Asset Management, a newcomer to the UK ETF market, is also the first provider to offer an ETF linked to the whole UK market through the FTSE All Share index.

While 7IM has not made use of this ETF, it says it likes the additional choice it gives portfolio managers who want low-cost exposure to the whole UK market.

7IM director Justin Urquhart Stewart says: “ETFs did not exist until the 1990s but are now the most traded stocks in the world although not used widely in the UK. We have about 840 ETFs internationally to choose from, of which about 50 to 60 are listed in the UK.

“The Lyxor ETF provides us with FTSE 100 exposure at an even lower cost and provides competition for iShares which is good. The Lyxor All Share ETF gives us another alternative. It is easy to trade and settle as an ordinary share. It is nice to know it is there.”

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