The ETF is designed for investors seeking to capture yield from the European equity market via a return-oriented Smart Beta approach, by providing exposure to companies performing share buybacks, a method of distributing income to shareholders which is likely to grow in Europe.
Share buyback programs allow cash-rich companies to repurchase their own stocks. Already widely used in the US, they should become more popular for European companies as they represent a more efficient use of cash in a low rate environment and give companies more flexibility than dividend programs.
Moreover, buyback programs are compelling for investors as they can provide higher returns in a low rate environment.
The MSCI Europe Equal Weighted Buyback Yield strategy index reflects the performance of MSCI Europe securities that have performed buybacks in the previous 12 months [1] . Moreover, this strategy index applies an equal weight methodology, thus increasing diversification and providing a purer exposure to the share buyback theme with a reduced bias.
Amundi ETF is launching this new product in response to client demand, following the launch of its US buyback ETF earlier this year, which prompted interest in a European version based on the same theme. The ETF has a TER [2] of 0,30% and will be made available in Paris and subsequently the major European exchanges.
Valerie Baudson, CEO at Amundi ETF, Indexing and Smart Beta, said: “This innovative ETF adds to our broad mono and multi Smart Beta range and reinforces the positioning of Amundi as a leading innovative player in the European ETF market.”
