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BGI offers ETFs to track Euro sector indices

Barclays Global Investors, subsidiary iShares is launching a raft of sector-based exchange traded funds to track four new Bloomberg pan-European sector indices.

The funds will use a new investment tool also known as iShares which is designed to bring together some of the benefits of both shares and funds.

Like the shares of a listed company, investors can trade them at any time through an IFA or stockbroker and, like a fund, they provide instant exposure to an entire market or sector index.

BGI is the first group to launch products to track the four new iBloomberg indices – the European technology, pharmaceuticals, telecoms and financials indices unveiled earlier this month.

BGI says iShares invested in the indices will provide investors with broad-based exposure to the biggest and most actively traded companies in their underlying sectors from 13 countries across Europe.

The iShares are Isa-able. Annual charge is 0.5 per cent and no stamp duty will normally be incurred on dealing. There are no initial charges.

iShares director John Demaine says: “Isa investors have an exciting new investment opportunity through iShares. With a variety of different iShares available, investors have a real choice across sectors and markets, to suit a variety of tastes.”

But some IFAs have given the new launch a cool reception. Plan Invest Group joint managing director Michael Owen says: “We are not sure if these are more suited to stockbrokers. Also, in these particular sectors we would recommend actively managed funds as opposed to any trackers, in spite of the low charges.”

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