Industry Updates

Amundi targets ‘economies of scale’ with latest Lyxor ETF merges

Lyxor ETF investors will see their fees cut following the merger

Theo Andrew

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Amundi is merging three Lyxor ETFs with its own strategies as it continues to seek “economies of scale” following the acquisition of its French rival in January.

In a shareholder notice, Amundi said the €121m Lyxor Core Euro Government Bond UCITS ETF (CMTX) and the €18m Lyxor EuroMTS Covered Bond Aggregate UCITS ETF (ECB) will be absorbed by the €1bn Amundi Prime Euro Govies UCITS ETF (PR1R) and the €106m Amundi Euro Corp 0-1Y ESG UCITS ETF (ECR1), respectively.

Furthermore, the Lyxor STOXX Europe 600 Real Estate UCITS ETF (MEH) will merge with the Amundi FTSE Epra Europe Real Estate UCITS ETF (EPRE). All three will merge on 18 November.

The shareholder notice said: “We believe that this merger will allow for a larger fund size and achieve economies of scale in the management of the fund that will directly benefit investors, while getting exposure to the same target asset classes.”

Following the mergers, investors in CMTX will see their total expense ratio (TER) reduce from 0.07% to 0.05 while ECB fees will halve from 0.165% to 0.08%.

Meanwhile, investors in EPRE will see their TER jump from 0.30% to 0.35% in the new ETF.

An Amundi spokesperson said in a statement: “These mergers are part of our natural and ongoing product range review and are driven by client demand. Every decision is part of a comprehensive analysis and with our client’s best interest in mind.”

It comes as Amundi merged two Lyxor ETFs with its Paris-aligned equivalents last month as it looks to meet its target of 40% ESG ETFs within its range by 2025.

Amundi’s €825m acquisition of Lyxor mean it had a product range of over 300 ETFs in Europe and a 14% market share, second only to BlackRock.

In May, the French giant started domiciling new ETFs in Ireland to benefit from an efficient Irish tax regime, including ETFs being treated as tax neutral like other fund structures regulated in Ireland.

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