(Vienna) Starting today for the first time, exchange-traded funds (ETFs) can be bought and sold on Wiener Börse. ETFs are funds that are traded directly on the stock exchange and are permanently tradable. They are just as flexible and liquid as stocks, but in contrast do not represent just one company, but an entire index (e.g. the ATX, the leading index of Wiener Börse). The principle is simple: When the ATX goes up, the value of the ETFs climbs as well and when the index drops the ETF declines accordingly. Most ETFs are less expensive than classical funds, because they are usually sold without a front-load charge. Orders in the smallest lots are also possible.
Exchange-traded funds are especially attractive for private investors and should draw their attention to Wiener Börse. "Even though private investors are increasingly investing in stocks, Austria still has a great deal of catching up to do in the area of investment in the capital market! At a percentage of 17% direct ownership of stocks and investment certificates in total monetary assets of a household, Austria is far below the European average of 32%," said Stefan Zapotocky, Member of the Management Board of Wiener Börse and expressed regret over the lack of interest of Austrians in the domestic capital market. Exchange-traded funds are intended to help attain European standards. The benefit for Wiener Börse according to Mr. Zapotocky is that ETFs increase liquidity on the exchange and thus have a positive effect on the cash and derivatives market.
Wiener Börse acquired two internationally renowned issuers for trading in ETFs: INDEXCHANGE Investment AG and Lyxor Asset Management. INDEXCHANGE Investment AG, founded in 2000 in Munich, is a market leader for ETFs and a specialist for passive fund management. The German HVB subsidiary will list seven exchange-traded funds starting today on Wiener Börse (e.g. on the ATX, DAX and EURO STOXX 50). "Listing our ETFs on Wiener Börse marks a major achievement in our efforts to expand our distribution activities in Austria. ATX®EX plays a central role, because it offers investors very inexpensive and flexible access to the Austria leading index. Additionally, this listing also offers an entry to the East European market, which we view as another growth market for ETFs," is how Thomas Uhlmann, member of the board at INDEXCHANGE explained the expansion of the firm specialized in ETFs into Austria.
Lyxor Asset Management, a 100% subsidiary of Société Génerale founded in 1998 will start trading four exchange-traded funds on Wiener Börse today. By contrast to INDEXCHANGE, the focus of Lyxors is on East European indices. "We firmly believe that the exchange-traded fund segment on WBAG will be a success. As a leading provider of ETFs in Europe, we would also like to offer Austrian institutional and private investors Lyxor products. This is why we are especially pleased to launch trading in the first exchange-traded fund on the CECE index calculated by Wiener Börse," said Frank Burkhardt, Head of Marketing and Sales for derivative products at t Lyxor Asset Management.
Trading in exchange-traded funds will become increasingly important for exchanges: In Germany, the fund volume has doubled in the past two years, while in the 1HY of 2005, a volume of EUR 22.5bn were traded, and in Switzerland, the trading volume in 1HY 2005 was EUR 3.3bn. Wiener Börse expects a traded volume for the coming year of EUR 500mn.