Lyxor ETF S&P ASX 200 tracks the performance of the 200 biggest index-eligible stocks on the Australian Stock Exchange. Index constituents include natural resources firm BHP Bilton, Commonwealth Bank Australia and National Australia Bank. Over 40 per cent of the index is made up of financials, while the next biggest sector, materials, comprises almost 25 per cent.
Lyxor ETF S&P 500 tracks the biggest 500 stocks in the US, including Apple, Microsoft and General Electric. IT is the biggest sector weighting at almost 19 per cent, while financials is the second biggest sector at 16.5 per cent.
Lyxor ETF S&P TSX 60 tracks the performance of 60 Canadian stocks which cover around 73 per cent of Canada’s equity market. It includes Royal Bank of Canada and Canadian Natural Resources . Financials represent the biggest sector at just over 34 per cent, while energy is the next biggest at almost 27 per cent.
ETFs are similar to tracker funds that passively track an index but the difference is they can be traded like a share, enabling investors to get in and out of the market quickly, while providing diversity of shares like an Oeic or unit trust.
These characteristics enable this ETF to provide easy and low-cost access to markets. Lyxor believes the majority of returns come from asset allocation and that ETFs can simplify asset allocation while keeping costs low. Lyxor’s ETF could be useful as an asset allocation tool for the broader Canadian, Australian and US stockmarket, rather than exposure to specific sectors.
BlackRock’s iShares offer ETFs that provide exposure to the same countries, but its Canadian and Australian ETFs track the MSCI Canada and MSCI Australian index. These have total expense ratios of 0.59 per cent, which is higher than the Lyxor ETFs.