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  • FIRST POST
    • samuzza
    • By samuzza 16th May 18, 9:15 AM
    • 4Posts
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    samuzza
    What does NT stand for in the following?: The Lyxor Core Morningstar UK NT
    • #1
    • 16th May 18, 9:15 AM
    What does NT stand for in the following?: The Lyxor Core Morningstar UK NT 16th May 18 at 9:15 AM
    What does NT stand for in The Lyxor Core Morningstar UK NT (DR) UCITS ETF'?

    At the moment I'm investing in LSE Vanguard EFTs, but thinking of switching over to the new Lyxor EFTs because the TER is much lower - only 0.04 for the US and UK funds (compared to 0.07 and 0.09 for the Vanguard's).

    Also the indexes are broader than the Vanguard's S&P and FTSE 100 fund. Lyxor's US Morning Star Index has over 800 components and the UK one 333.

    Any thoughts on Lyxor's EFTs compared Vanguard, iShares, etc?
Page 1
    • kidmugsy
    • By kidmugsy 16th May 18, 12:48 PM
    • 12,073 Posts
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    kidmugsy
    • #2
    • 16th May 18, 12:48 PM
    • #2
    • 16th May 18, 12:48 PM
    I don't know much about this but when I looked at Lyxor a couple of years ago they offered mainly "synthetic" ETFs, so that rather than owning shares they tended to own derivatives. If you clicked through to their literature you could see whether that is true of this one.
    Free the dunston one next time too.
    • Alexland
    • By Alexland 16th May 18, 1:13 PM
    • 3,633 Posts
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    Alexland
    • #3
    • 16th May 18, 1:13 PM
    • #3
    • 16th May 18, 1:13 PM
    Well it's tracking the Morningstar UK NR (Net Return) index so maybe Net Tracker?

    You can phone them on 0800 707 6956 or email info@lyxoretf.co.uk
    • grey gym sock
    • By grey gym sock 16th May 18, 6:11 PM
    • 4,444 Posts
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    grey gym sock
    • #4
    • 16th May 18, 6:11 PM
    • #4
    • 16th May 18, 6:11 PM
    i think lyxor started out doing more synthetic ETFs, but their new "core" range are all physical ETFs. apparently, enough investors don't like synthetic ETFs (sensibly, IMHO) that some providers have changed tack a bit.

    IIRC, some of their core ETFs don't (yet) have reporting fund status; without that, it would be a bad idea to hold them outside tax shelters (because capital gains could be taxed as income); but this is not an issue inside an ISA or SIPP.

    they are mostly quite small ETFs so far, and domiciled in luxembourg, which is relatively unusual. if you'd prefer a more mainstream product, which you can be confident will be around for a long time in its current format, then that might suggest sticking to vanguard or ishares ETFs, domiciled in ireland.

    the exact index tracked may matter. i'd agree that generally a broader index (including more stocks) is better. if you're looking at european ETFs, check whether it's eurozone only, or all of europe ex-UK (which is broader), or all of europe including UK (which is broader again, but perhaps you have the UK covered separately).

    if you're actually thinking of selling an existing ETF (instead of just directing new cash at lyxor ETFs), then compare the costs of switching (dealing commissions + bid-offer spread) to the annual savings. e.g. (not actual figures) supposing the OCF is 0.05% lower, but you'd pay 2 dealing commissions at 5 each to switch, on a current holding worth 5000, which comes to 0.2%, + a bid-offer spread of 0.1%, then that comes to 0.3% to switch, which means it would take 6 years to get that back in lower OCF. which feels a bit long to me (and it would become even longer if vanguard/ishares trim their OCF during those 6 years (by more than lyxor trim theirs)).

    alternatively, if you keep a vanguard/ishares ETF, but buy a lyxor 1 with new money, then you have the complication of an extra holding. (and eventually, an extra dealing commission to sell.) which may or may not irritate you.
    • Alexland
    • By Alexland 10th Jun 18, 10:04 PM
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    Alexland
    • #5
    • 10th Jun 18, 10:04 PM
    • #5
    • 10th Jun 18, 10:04 PM
    Actually the new range of Lyxor Core ETFs are more interesting that I first realised. In addition to being entirely physical direct replication Lyxor will not allow the securities to be loaned. Their MSCI World ETF (LCWL) has an OCF of only 0.12% (compared to the classic Blackrock SWDA at 0.20%) and the initial results seem to be tracking the benchmark nicely.

    If you can cope with 100% equities volatility and have a long term investment outlook then you could do a lot worse than holding this ETF on an execution only ISA platform such as iWeb or Jarvis X-O. Ultra low cost investing.

    https://www.lyxoretf.co.uk/en/instit/products/range/reducecost

    Alex.
    Last edited by Alexland; 10-06-2018 at 10:40 PM.
    • Economic
    • By Economic 11th Jun 18, 8:31 AM
    • 364 Posts
    • 375 Thanks
    Economic
    • #6
    • 11th Jun 18, 8:31 AM
    • #6
    • 11th Jun 18, 8:31 AM
    The bid-offer spread for the Lyxor Core MSCI World ETF is about 1.6% whereas the iShares MSCI World ETF is about 0.09% according to the prices quoted by IG. Obviously, this is because the iShares ETF is very liquid whereas the Lyxor ETF is not very liquid due to the low volume of trading in this ETF at the moment. I would wait for the volume of trading to increase and the bid-offer spread to decrease.
    • Alexland
    • By Alexland 11th Jun 18, 9:47 AM
    • 3,633 Posts
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    Alexland
    • #7
    • 11th Jun 18, 9:47 AM
    • #7
    • 11th Jun 18, 9:47 AM
    The bid-offer spread for the Lyxor Core MSCI World ETF is about 1.6% whereas the iShares MSCI World ETF is about 0.09% according to the prices quoted by IG. Obviously, this is because the iShares ETF is very liquid whereas the Lyxor ETF is not very liquid due to the low volume of trading in this ETF at the moment. I would wait for the volume of trading to increase and the bid-offer spread to decrease.
    Originally posted by Economic
    Good point, maybe Blackrock will have reduced their SWDA OCF to compete by then?

    Alex.
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