BlackRock has partnered with MSCI on a new suite of ETFs providing exposure to individual sectors of the European equity market.
The funds are the lowest-cost ETFs providing exposure to individual sectors of the European equity market.
The suite has debuted with six ETFs on the information technology, consumer discretionary, financials, energy, health care, and consumer staples sectors.
The funds are linked to sector indices derived from the parent MSCI Europe Index, a reference for large and mid-cap companies from 15 developed market countries across Europe.
Developed markets in the parent index include Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the UK.
Stocks are assigned to sectors according to the Global Industry Classification Standard (GICS).
Each index is weighted by float-adjusted market capitalization subject to a cap of 35% on the largest constituent and 20% on any other stock. Constituents are reconstituted and rebalanced quarterly or as needed to satisfy the capping constraints.
The ETFs have listed on London Stock Exchange in pound sterling and on Deutsche Börse Xetra in euros.
They are as follows:
iShares MSCI Europe Information Technology Sector UCITS ETF (ESIT LN; ESIT GY)
iShares MSCI Europe Consumer Discretionary Sector UCITS ETF (ESIC LN; ESIC GY)
iShares MSCI Europe Financials Sector UCITS ETF (ESIF LN; ESIF GY)
iShares MSCI Europe Energy Sector UCITS ETF (ESIE LN; ESIE GY)
iShares MSCI Europe Health Care Sector UCITS ETF (ESIH LN; ESIH GY)
iShares MSCI Europe Consumer Staples Sector UCITS ETF (ESIS LN; ESIS GY)
Each ETF comes with an expense ratio of just 0.18%, the lowest-cost amongst all European sector ETFs currently available. Income is capitalized within the portfolios.
The funds are notably cheaper than BlackRock’s existing European sector ETFs which come with expense ratios of 0.46% and are linked to indices derived from the parent Stoxx Europe 600. This suite numbers 18 funds and houses over €5.1 billion in assets under management.
Four rival issuers also have suites of European sector ETFs, each priced with expense ratios of 0.30%. DWS, Lyxor, and Invesco offer suites linked to Stoxx Europe 600 sector indices, while SSGA provides funds tracking MSCI’s sector benchmarks.