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Mathieu Mouly

Lyxor Asset Management - Best Fixed Income - Cash (money market) ETF Management Firm


2015 was a game changing year for Lyxor ETFs according to Mathieu Mouly (pictured), head of ETF sales. The firm's ETF business is 15 years old this year, having been early into the market, and has celebrated that by achieving all time high inflows of EUR8.9 billion in 2015.

Mouly says: "It is exciting when you do your best year ever. We are also the third largest ETF provider with assets of EUR44 billion and second by liquidity – with a market share of 20 per cent, which means that of all recorded ETF trading in Europe last year, we had a 20 per cent market share."

In terms of product launches, Lyxor had a very active year in 2015. The Lyxor Smart Cash fund was launched, offering a money market fund based on the overnight rates of, initially, the Euro, targeting returns of Eonia plus 19 basis points. Other classes have been launched against GBP targeting plus 23.5 basis points and the US dollar, targeting plus 30 basis points.

Mouly says: "Within the money market world as soon as you want to get higher performance you have to take more duration risk, the risk of lending money to someone for one day, a week, a month or whatever period. We are delivering this positive performance without duration risk."

Lyxor's Smart Cash fund has raised EUR1 billion since launch attracting interest from a range of investors.

"We are facing interest on the world markets from wealth managers who don't know where to put their client's cash, corporates who are suffering from a lack of performance on money market funds and asset managers who want neutral performance without any risk," Mouly says. "All types of clients and this may be the reason for the success."

Other new products included a family of ETFs, which were launched in partnership with JP Morgan, based on five European risk factors, both as individual risk factors and as a multi factor product. The European multi factor product saw inflows of EUR50 million and a global version is coming soon.

"People have a strong interest in factors but they are not always sure what they should buy. The multi factor allows them to allocate to all five factors in one ETF," Mouly says.

Another new product has been a range of ETFs based on minimum variance strategies with FTSE, which are designed to reduce volatility. Here Mouly explains that these ETFs have superior diversification in comparison to other Minimum Variance strategies, with 50-60 per cent of the original index universe maintained.

These products are proving popular with all types of asset owners who are trying to reduce the volatility of their portfolios as it controls the risk and reduces the drawdowns, by about 20 per cent.

Mouly explains that Lyxor has taken a different path with its fixed income ETFs.

"We have reduced the cost of our gilts and treasuries ETFs to 7 basis points making them significantly the cheapest on the market, which is especially important in this low yield environment," he says.

"Corporate bond ETFs have come down to 9 basis points for the same reason. It shows our commitment to UK investors, and a desire to give them a better deal and improve their performance."

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