US sectors are one of the most actively traded market segments in the world, with around $6bn (£4.2bn, €5.4bn) worth of sector ETFs traded each day.
Christopher Mellor, equity product management at Source, said: “The drivers of equity market returns typically shift along with changes in the economic climate and investor risk appetite.
“Some sectors tend to behave differently during certain phases of the cycle, and investors wanting to take advantage of this sector rotation are able to adjust their portfolio exposures through sector ETFs.
“These have been extremely popular tools for our investors, who currently have more than $1.6bn of assets across our range of US sector ETFs.”
Compliance and track record
The two new funds are:
- Source Financial Services S&P US Select Sector Ucits ETF
- Source Real Estate S&P US Select Sector Ucits ETF
Each ETF aims to deliver the performance of the relevant S&P Select Sector Capped 20% Index.
Weightings are based on market capitalisation, but with the maximum weighting of individual constituents capped to ensure Ucits-compliance.
The indices have shown high correlation with the (uncapped) S&P Select Sector Indices, which are used as the underlying for many US-listed ETFs but are not Ucits-compliant.
The performance track records of Source US Sector ETFs compared to their reference indices have been consistent, with tracking errors typically less than 0.003%
The annual management fee for each ETF is 0.30%.
