First Fundamentals-Based ETFS Launch on London Stock Exchange

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The FINANCIAL — Spa ETF Plc (Spa) last week became the second provider to join the UK’s expanding Exchange Traded Fund (ETF) market this month, issuing the first ETFs on the London Stock Exchange to track quantitatively-driven indices. Spa’s three ETFs join the eighteen new ETFs issued last week, bringing the total number of ETFs on the Exchange to 79.


Spa’s ETFs will track indices from research provider MarketGrader, which aim to outperform major US indices by selecting stocks based on analysis of key company fundamentals. The ETFs launched by Spa are the MarketGrader 40, the Market Grader 100 and the Market Grader 200.


"This series of ETFs from Spa ETF Plc marks a significant development in the UK ETF marketplace, presenting the growing number of investors interested in using ETFs with a new opportunity to outperform the major market capitalisation based indices while still retaining the low cost diversification of a tracker. Spa’s new series of ETFs demonstrates the choice and innovation that the removal of the old stamp duty barrier to ETF issuers has unleashed”, David Shrimpton, Head of Product Management and Development at the London Stock Exchange said.


“Since the MarketGrader 40 index went live in 2003 it has achieved a return of 67.75%, compared to the S&P 500, which has returned 29.63% (to 7 September 2007). We look forward to maintaining such positive returns and see added investor benefit by providing investors with our à la carte menu of Spa MarketGrader ETFs,” Daniel Freedman, director, Spa ETF Plc, commented.
The Exchange’s 79 ETFs cover a range of UK and global equity and bond indices. As well as now offering access to indices based on company fundamentals, the range includes ETFs based on major country and regional indices, company size, dividend yield and sector. The Exchange operates a multicurrency trading service for ETFs which gives investors the choice of buying ETFs in either the local currency or the base currency of the index. The total value traded in ETFs on the London Stock Exchange during the first half of 2007 was £15.6 billion, a 79 per cent increase on the value traded in the first six months of 2006.

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