Barclays Launches Europe-Focused ETN

Barclays Plc, the U.K.-based bank behind the iPath family of exchange-traded notes, is launching two ETNs this week, including today’s rollout of the Barclays ETN+ FI Enhanced Europe 50 ETN (NYSEArca: FEEU), which is organized around European blue chip companies.

It also launched one yesterday, the Barclays ETN+ FI Enhanced Global High Yield ETN, (FIGY) that’s focused on high-yielding stocks from around the world.

ETNs are frequently created for a relatively tight coterie of clients, so it’s a bit presumptuous to read too much into the broad significance of a given launch, considering that some strategies packaged in an ETN wrapper are little more than a custom-made investment for high-net-worth clients.

But it seems safe nonetheless to view FEEU as a play on Europe’s recovery from its debt crisis, and FIGY as part of an intensifying global search for income at a time of ultra-low yields that has prevailed since the market crash of 2008-2009.

ETN For A Recovering Europe

The security that’s launching today, FEEU, is similar to the $64 million SPDR Stoxx Europe 50 ETF (FEU).

The State Street ETF comes with an annual expense ratio of 0.29 percent, or $29 for each $10,000 invested.

FEEU, meanwhile, has what Barclays calls an annual “exposure fee rate” that is the sum of 0.76 percent plus the three-month Libor rate, according to the latest paperwork on the ETN that Barclays filed on the new ETN.

The index around which FEEU is organized is composed of 50 European blue chip companies selected from within the Stoxx Europe 600 Index. The parent index contains the 600 largest stocks traded on the major exchanges of 18 European countries:Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

Global Quest For Yield

FIGY, the security that launched yesterday, is organized around the MSCI World High Dividend Yield USD Gross Total Return Index.

It comes with an annual “exposure fee rate” that is the sum of 0.64 percent, plus the three-month Libor rate effective on the relevant valuation date, according to  regulatory paperwork filed in connection with the launch.


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