Lyxor AM Lists On Euronext 4 Trackers

The FTSE RAFI indices of fundamental strategy were conceived by Research Affiliates, an investment consultancy firm created in 2002 by Robert Arnott. As opposed to traditional market cap indices, they weight each stock according to 4 fundamental criteria: sales, cash-flows, dividends and book value.

Isabelle Bourcier, ETF Coordinator for Lyxor AM explains: "the objective of these fundamental strategy indices is to offer better performance and reduced volatility in the long term with respect to traditional indices. They also propose a more reliable link to the economic reality of the component companies. "

Robert Arnott, Research Affiliate Chairman specifies: "we do believe that cap-weighted indexes suffer from an inherent flaw as they overweight all overvalued stocks and underweight all undervalued stocks. This renders cap-weighted indexes particularly vulnerable to underperformance relative to indexes immune to this shortcoming.

Research Affiliates has pioneered an innovative approach to index construction. Our method uses fundamental accounting measures of firm size, rather than market capitalization, in index construction. By avoiding the inherent valuation bias of cap weighting, fundamental strategy indexes outperformed cap-weighted index strategies by as much as 200 bps in the US and by more than 250 bps internationally, based on extensive back testing (to 1962 in the US and to 1988 internationally). "

Imogen Dillon-Hatcher, Managing Director of FTSE EMEA added: "FTSE is committed to offering investors choice and diversification across investment styles. We are proud to license Lyxor AM to use the FTSE RAFI series and be involved with the burgeoning interest in fundamental indexing." Fundamental strategy indices have encountered strong success with institutional investors in the United States but also with retail investors, who find within them additional strategy for their equity investments (currently USD6.5 billion of assets invested using the FTSE RAFI methodology).

Lyxor AM offers investors real-time access on Euronext Paris to the indices developed by FTSE RAFI through four new trackers covering the Eurozone, Europe, the United States and Japan. These new trackers are Mutual funds listed on Euronext Paris; they are eligible for the PEA (Securities Savings Plan) and offer reduced operating expenses (0.75% p.a. VAT included):

- Lyxor ETF FTSE RAFI Europe (ISIN: FR0010400770-Mnemo REU)

- Lyxor ETF FTSE RAFI Eurozone (ISIN FR0010400788-Mnemo REZ)

- Lyxor ETF FTSE RAFI US 1000 (ISIN FR0010400804-Mnemo RUA)

- Lyxor ETF FTSE RAFI Japan (ISIN FR0010400796-Mnemo RJP)

Thibaud de Cherisey, in charge of the NextTrack segment on Euronext, highlights: "these introductions help to develop the new product family launched by Lyxor on NextTrack at the beginning of this year: strategy index trackers. With these innovative launches, the range of trackers has added a new product type offering an added value in terms of investment strategy. To date, 175 funds are listed on NextTrack for an amount of Eur48.6 billion, which makes it the largest platform in Europe." -- www.euronext.com