THIS IS AN ADVERTISING FEATURE
When investing in a specific geography, investors need their exposure to be driven by activity in that country. Traditional indices can inadvertently expose investors to unintended geographies. This affects performance and risk, particularly with mid- and small-caps.
The Solactive UK Mid and Small Cap ex Investment Trust index can be a solution to this challenge
Refining core UK exposure
The traditional UK mid- and small-cap index, the FTSE 250, exposes investors to a high degree of non-UK holdings:
-Investment Trusts account for 26% of the index.1
-Many investment trusts invest in highly uncorrelated assets in emerging markets or the Asia-Pacific region.
-This unknowingly exposes investors to potential additional elements of risk.
To avoid this, investors looking for pure UK mid- and small-cap exposure can consider allocating to a product which tracks an index excluding investment trusts - such as the Solactive UK Mid and Small Cap ex Investment Trust index.
Finding a cleaner alternative
Most UK mid- and small-cap products offer exposure to the FTSE 250, given this is the traditional index used to gain access to this area of investment. But there is an alternative. The Solactive UK Mid and Small Cap ex Investment Trust index eliminates all investment trusts from the index, thus offering a pure UK-based holding with a higher percentage of UK based revenues, as compared to the FTSE 250 and avoiding unintended ex-UK exposures.
Investors can access this index through an ETF.
-An ETF is a simple, low cost way of getting exposure to a specific market.
-As ESG gains ground among investors, they can rest assured the ETF will explicitly not invest in companies involved in controversial weapons.
-The Solactive UK mid and small cap index ex investment trusts is run by an experienced, regulated and robust index provider.
As the short-term outlook for the UK, and many other countries, remains uncertain, gaining exposure through a low-cost structure, such as an ETF, is practical and efficient and offers diversified exposure even when investing small amounts of capital.
Investing in the Amundi Prime UK Mid- and Small-Cap UCITS ETF
-With an ongoing charge of just 0.05% the fund can be used by investors as a building block in an ultra-low cost portfolio.
-The fund offers simple, efficient exposure to the performance of UK companies without unintended exposure.
-The fund is easy to trade on the London Stock Exchange.
-The fund is physically replicated meaning it follows the index performance as simply as possible.
-The fund is UCITS-compliant and incorporates a controversial weapons screen.
Fund Facts
Fund Name: Amundi Prime UK Mid and Small Cap UCITS ETF
Benchmark: Solactive United Kingdom Mid & Small Cap ex Investment Trust Index
Bloomberg ticker: PRUK LN
ISIN: LU2182388152
OGC: 0.05%
Responding to investor demand
Exposure to the UK equity market accounts for a core part of investment portfolios for UK investors who have called for purer exposure to this market. Funds providing access to the mid- and small-cap market are often considered to be more representative of the country’s performance compared to their large-cap counterparts. Some investors feel this sector is a more accurate reflection of profits generated within the UK borders. The Solactive UK Mid and Small Cap ex Investment Trust index currently includes exposures such as Greggs, Marks & Spencer and Trainline.
Smaller companies with an entrepreneurial spirit tend to thrive following a crisis. Though the coronavirus outbreak may have caused increased volatility and ambiguity in the short term, continued investment is likely to produce more encouraging results over the long term. Exposure to the UK economy remains a key building block within the many portfolios. If investors are to benefit from any future economic recovery in the UK, they must allocate to an index which provides direct exposure to UK mid- and small-cap businesses and avoids unintended geographical exposures.
To find out more about the Amundi Prime UK Mid and Small Cap ETF visit amundietf.com or email us at info-etf@amundi.com
Key risks of investing in ETFs
-When buying an ETF, investors are exposing themselves to the risk associated with the markets to which the ETF is exposed. In this case, the UK mid and small cap market.
-The price and value of investments are linked to the liquidity risk of the index components, the value of the investment can go down as well as up.
-Investors also run the risk of losing their invested capital or not getting back the original amount they invested.
-The fund’s investment objective may only be partially achieved.
-Investment in the Amundi Prime UK Mid and Small Cap ETF is also exposed to the risk associated with the volatility of the securities which make up the underlying Solactive index.
1 Source: Solactive, Bloomberg - Other indices are used for illustration purposes only. As at June 2021
IMPORTANT INFORMATION
Important information: This document is not intended for citizens or residents of the United States of America or to any “U.S. Person”, as this term is defined in SEC Regulation S under the
U.S. Securities Act of 1933. The “US Person” definition is provided in the legal mentions of our website www.amundi.com. Investors are subject to the risk of loss of capital. Promotional & noncontractual Information which should not in any way be regarded as investment advice, an investment recommendation, a solicitation of an investment offer, or a purchase of any financial securities. The accuracy, completeness and relevance of the information, forecasts and analyses provided are not guaranteed. They have been prepared from sources considered reliable and may be altered without prior notice. The information and forecasts are inevitably partial, provided on the basis of market data observed at a particular moment, and are subject to change. This document may contain information from third parties that do not belong to Amundi (“Third Party Content”). Third Party Content is provided for information purposes only (for illustration, comparison, etc.). Any opinion or recommendation contained in Third Party Content derives exclusively from these third parties and in no circumstances shall the reproduction or use of those opinions and recommendation by Amundi AM constitute an implicit or explicit approval by Amundi AM. Information reputed exact as of June 2021. Reproduction prohibited without the written consent of the Management Company. Amundi ETF designates the ETF business of Amundi Asset Management. The ETF Amundi Prime UK Mid and Small Cap UCITS ETF is a sub-fund of Amundi Index Solutions ( the “SICAV”), a Luxembourg fund, with a Luxembourg RCS n°B 27.804, located 5, allee Scheffer, L-2520 Luxembourg. The Funds were approved for public distribution by the Commission de Surveillance du Secteur Financier of Luxembourg. This Document was not reviewed/ stamped/approved by any Financial Authority. Amundi ETF funds are neither sponsored, approved nor sold by the index providers. The index providers do not make any declaration as to the suitability of any investment. A full description of the indices is available from the providers.
For Professional Clients only. This document is being issued inside the United Kingdom by Amundi (UK) Limited, 77 Coleman Street, London EC2R 5BJ, which is authorised and regulated by the Financial Conduct Authority (the “FCA”) and entered on the FCA Financial Services Register under number 114503. This may be checked at https://register.fca.org.uk/ and further information of its authorisation is available on request. Past performance is not a guarantee or indication of future results. The funds and their relevant sub-funds (the “Funds”) under their respective fund range that are referred to in this document are recognised collective investment schemes for the purposes of Section 264 of the Financial Services and Markets Act 2000. This document is only directed at persons who are Professional Clients (as defined in the FCA’s Handbook of Rules and Guidance), must not be distributed to the public and must not be relied or acted upon by any other persons for any purposes whatsoever. Potential investors in the UK should be aware that none of the protections afforded by the UK regulatory system will apply to an investment in the Funds and that compensation will not be available under the UK Financial Services Compensation Scheme. The investments described herein are only available to such persons and this document must not be relied or acted upon by any other persons. This document may not be distributed to any person other than the person to whom it is addressed without the express prior consent of Amundi .Amundi Asset Management, French “Societe par Actions Simplifiee” - SAS with capital of €1,086,262,605 - Portfolio Management Company approved by the AMF (French securities regulator) under no. GP 04000036 - Registered office: 90 boulevard Pasteur, 75015 Paris - France. 437 574 452 RCS Paris.
The financial instrument is not sponsored, promoted, sold or supported in any other manner by Solactive AG nor does Solactive AG offer any express or implicit guarantee or assurance either with regard to the results of using the Index and/or Index trade mark or the Index Price at any time or in any other respect. The Index is calculated and published by Solactive AG. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards the Issuer, Solactive AG has no obligation to point out errors in the Index to third parties including but not limited to investors and/or financial intermediaries of the financial instrument. Neither publication of the Index by Solactive AG nor the licensing of the Index or Index trade mark for the purpose of use in connection with the financial instrument constitutes a recommendation by Solactive AG to invest capital in said financial instrument nor does it in any way represent an assurance or opinion of Solactive AG with regard to any investment in this financial instrument.
