Pan-European exchange Euronext says it has launched a market segment for exchange-traded funds – ETFs or trackers – called NextTrack.
Merrill Lynch was the first to list its products as part of the new segment, with its LDRS, tracking the Dow Jones Euro Stoxx50 and the Dow Jones Stoxx 50.
“We expect that in a year there will be about 12 ETFs on NextTrack,” says Alice Jentink of Euronext in Amsterdam. “In the next three months there will be trackers on the CAC40 and the AEX, and we expect more later in the year.”
Jentink says the segment and the trackers within it are not aimed at a specific type of investor and can equally be used by professional traders and institutional as well as private investors.
“You can use them for hedging, with futures and options on the index. For private investors it’s a cheap and easy way of investing in the index,” she says.
NextTrack serves to help investors identify these new products more easily, the exchange said in a statement, and choose their preferred index or portfolio type from he range of trackers available.
Initially, it says, trackers will be traded on both the TSA system operated by Euronext Amsterdam and NSC at Euronext Paris. But in the second half of the year they will be moved to the new single platform to be shared by the Amsterdam, Brussels and Paris markets.
Like other Euronext equity products, the ETFs are traded through a central orderbook and liquidity is guaranteed by at least two market makers per fund. Euronext says it continuously calculates and publishes an indicative net asset value per unit which reflects the index being makes tracked.