Amundi Launches Europe’s First Local Buyback ETF

Amundi has launched the first exchange traded fund (ETF) in Europe to track an index of European share buybacks to generate returns for investors.

When companies buy back their own stock to reduce outstanding shares and increase the remaining shares’ value, it can improve the capital structure of the company and investors can receive boosted returns in their investment. This is the thinking behind the new fund, which will replicate the MSCI Europe Equal Weighted Buyback Yield Index.

It has a total expense ratio of 0.30 percent. The move follows Amundi’s earlier launch of its U.S.-focused buyback ETF (ticker BYBU), which was launched in February and costs 0.15 percent. The synthetic fund has fallen 6 percent over three months in U.S. dollar terms.

Valerie Baudson, CEO at Amundi ETF, indexing and smart beta, said: “This innovative ETF adds to our smart beta range and reinforces the positioning of Amundi as a leading innovative player in the European ETF market.”

iShares brought to market a U.S. buyback ETF (ticker BACK) in February, which costs 0.55 percent, and Invesco PowerShares created the first ETF in Europe to track global buybacks in November last year for fees of 0.39 percent.