Bulgarian ETF issuer Expat Asset Management has launched its first ETF on Deutsche Börse – the Expat Bulgaria SOFIX UCITS ETF (BGX GR) – providing exposure to the most liquid equities on the Bulgarian Stock Exchange.
Nicola Yankov, chairman of the board of directors of Expat Asset Management.
The ETF, which has been cross-listed from the Bulgarian Stock Exchange, tracks the SOFIX Index, Bulgaria’s foremost index for equity market performance.
The index comprises 15 constituents and is weighted by free-float market capitalisation.
Due to the small number of constituents, the index provide relatively concentrated exposure; however, capping at the issuer level of 15% allows the fund to remain UCITS-compliant.
Commenting on the launch, Nicola Yankov, chairman of the board of directors of Expat Asset Management, said: “Expat Bulgaria SOFIX UCITS ETF is designed to give investors liquid, diversified, transparent and cost-effective exposure to the Bulgarian equity market. It represents a unique market proposition which provides access to country-specific exposure for international investors, overcoming deficiencies such as lack of liquidity, lack of access and other technical factors typical for many of the Central and Eastern Europe (CEE) markets.
“We believe that the Frankfurt marketplace is the natural financial hub for trading the indices of the CEE countries globally and hope that the listing of this ETF on Xetra is the beginning of a long-lasting partnership with Deutsche Börse.”
Dr Martin Reck, managing director of cash market at Deutsche Börse, added: “This new ETF enables investors to participate for the first time in the performance of the Bulgarian stock market, providing an interesting expansion of our product offering. With this new listing at the very beginning of 2018 we are continuing the success of the previous year, where we won a total of three new issuers for our ETF segment.”
On Deutsche Börse, BGX trades in euros, while its original listing on the Bulgarian Stock Exchange trades in Bulgarian levs. Dividend payments are accumulated within the fund and it has annual operating costs of 1.38%.
A listing on the London Stock Exchange is anticipated in due course.
Expat offers a range of other single-country ETFs covering CEE, including Poland, Czech Republic, Slovakia, Hungary, Slovenia, Serbia, Macedonia, Romania, plus Greece.
Investors looking for alternative ETFs with similar exposure could perhaps consider the Lyxor Eastern Europe CECE EUR UCITS ETF (TER 0.50%) or the Amundi MSCI Eastern Europe Ex Russia UCITS ETF (TER 0.20%). Both funds tracks Czech, Hungarian and Polish blue-chip stocks.