The new platform has been launched to enable Source to launch a wider range of physically replicated products. It currently has 15 physical products, including fixed income ETFs, precious metal ETPs and a China A-shares equity ETF. The platform is designed to complement the existing range of ETPs.
The new ETFs to be launched on the platform will share the same characteristics as those on existing Source platforms, including intraday trading and liquidity. The group said investors should not see a material difference when buying or selling ETFs on the new platform. The group also said it had no plans to convert any of its existing exchange traded products from its multi-counterparty swap model.
Lee Kranefuss, chairman of Source, commented: “We want to enable our investors to select the structure they prefer and are most comfortable with. Furthermore, having capabilities to launch more physical products will also allow us to target a wider investor base. Over 75% of investor flow since January 2014 has been into physical ETFs, so there is clearly strong demand for this type of replication method.”
“We have a wide variety of investment ideas in the pipeline for 2016, some of which may be more suitable for physical replication and others for alternative methods,” he continued. “The increased flexibility provided by the new platform allows us to further provide what is appropriate for – and demanded by – our investors.”
LGIM currently manages £263bn (€375bn, $399.4bn) in index funds across Europe. Northern Trust, Source’s current service provider, will act as the administrator and custodian for the new platform.
