Change Country
Welcome to DenmarkWelcome
Please read the important information below before continuing to our website

Please read the important information below before continuing to our website.  

By clicking on your client type to enter the website, you are confirming that you have read and understood the important information that is contained below, and you accept the terms of the Privacy and Cookies policy.


This website is published by Lyxor International Asset Management (LIAM), a French asset management company approved by the AMF (17 place de la Bourse 75082 Paris Cedex 02) under the UCITS (2009/65/EC) and AIFM (2011/31/EU) directives.

The website is hosted by on Microsoft Azure servers.

This website is subject to French and Danish law.


A professional client is a client that is either a per se professional client or an elective professional client (Note article 4 (1) 12 of Mifid )

Marketing Restrictions and Implications


Lyxor UCITS compliant Exchange Traded Funds (Lyxor UCITS ETFs) referred to on this website are open ended mutual investment funds (i) established under the French law and approved by the Autorité des Marchés Financiers (the French Financial Markets Authority), or (ii) established under the Luxembourg law and approved by the Commission de Surveillance du Secteur Financier (the Luxembourg Financial Supervisory Committee). Most, , of the protections provided by the Danish regulatory system generally and for funds authorised in Denmark do not apply to these exchange traded funds (ETFs).


This website is exclusively intended for persons who are not "US persons", as such term is defined in Regulation S or the US Securities Act 1933, as amended, and who are not physically present in the US. This website does not constitute an offer or an invitation to purchase any securities in the United States or in any other jurisdiction in which such offer or invitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. Potential users of this website are requested to inform themselves about and to observe any such restrictions.


Index Replication Process


Lyxor UCITS ETFs follow both physical and synthetic index replication process.


However, most Lyxor UCITS ETFs follow synthetic replication process. This consists of entering into a derivative transaction (a ‘Performance Swap’, as defined below) with a counterparty that provides complete and effective exposure to its benchmark index. Lyxor has adopted this methodology in order to minimise tracking error, optimise transaction costs and reduce operational risks.


A Performance Swap is a contractual agreement which is negotiated over-the-counter (OTC) between two parties: the Lyxor UCITS ETF and its counterparty. From a risk perspective, each Performance Swap ranks equally with other senior unsecured obligations of the counterparty, such as common bonds (i.e., same rights to payments). In the Performance Swap, the counterparty of the Lyxor UCITS ETF commits to pay the Lyxor UCITS ETF a variable return based on a pre-determined benchmark index, instead of a fixed stream of income (as in bonds). At the same time, the counterparty will receive from the Lyxor UCITS ETF the performance and any related revenues generated by the basket's assets (excluding the value of the Performance Swap) held by the Lyxor UCITS ETF. Information provided on individual ETFs includes data on the basket relating to the ETF and the percentage value of the basket represented by each asset. The information is relevant to the closing values on the date given. 


Investment Risks


The Lyxor UCITS ETFs described on this website are not suitable for everyone. Investors' capital is at risk. Investors should not deal in this product unless they understand, having obtained independent professional advice where necessary, its nature, terms and conditions, and the extent of their exposure to risk. The value of the product can go down as well as up and can be subject to volatility due to factors such as price changes in the underlying instrument and interest rates. If a fund is quoted in a different currency to the index, currency risks exist.


Prior to any investment in any Lyxor UCITS ETF, you should make your own appraisal of the risks from a financial, legal and tax perspective, without relying exclusively on the information provided by us. We recommend that you consult your own independent professional advisors (including legal, tax, financial or accounting advisors, as appropriate).


Specific Risks


·         Capital at Risk. ETFs are tracking instruments: Their risk profile is similar to a direct investment in the Benchmark Index. Investors’ capital is fully at risk and investors may not get back the amount originally invested. Investments are not covered by the provisions of the Financial Services Compensation Scheme (“FSCS”), or any similar scheme.

·         Counterparty Risk. Investors may be exposed to risks resulting from the use of an OTC Swap with Societe Generale. Physical ETFs may have Counterparty Risk resulting from the use of a Securities Lending Programme.

·         Currency Risk. ETFs may be exposed to currency risk if the ETF or Benchmark Index holdings are denominated in a currency different to that of the Benchmark Index they are tracking. This means that exchange rate fluctuations could have a negative or positive effect on returns.

·         Replication Risk. ETFs are designed to replicate the performance of the Benchmark Index. Unexpected events relating to the constituents of the Benchmark Index may impact the Index provider’s ability to calculate the Benchmark Index, which may affect the ETF’s ability to replicate the Benchmark Index efficiently. This may create Tracking Error in the ETF.

·         Underlying Risk. The Benchmark Index of a Lyxor ETF may be complex and volatile. When investing in commodities, the Benchmark Index is calculated with reference to commodity futures contracts which can expose investors to risks related to the cost of carry and transportation. ETFs exposed to Emerging Markets carry a greater risk of potential loss than investment in Developed Markets as they are exposed to a wide range of unpredictable Emerging Market risks.

·         Liquidity Risk. On-exchange liquidity may be limited as a result of a suspension in the underlying market represented by the Benchmark Index tracked by the ETF; a failure in the systems of one of the relevant stock exchanges, Societe Generale or other Market Maker systems; or an abnormal trading situation or event. 


The securities can be neither offered in nor transferred to the United States.




Any statement in relation to tax, where made, is generic and non-exhaustive and is based on our understanding of the laws and practice in force as of the date of this document and is subject to any changes in law and practice and the interpretation and application thereof, which changes could be made with retroactive effect. Any such statement must not be construed as tax advice and must not be relied upon. The tax treatment of investments will, inter alia, depend on an individual’s circumstances. Investors must consult with an appropriate professional tax adviser to ascertain for themselves the taxation consequences of acquiring, holding and/or disposing of any investments mentioned on this website. 

Further information on the risk factors are available in the [Risk Warning – link to risk page] section of the website.


Any fund prospectus and supplements are available at Information given about the past performance of the funds is no guarantee of future performance. No investment decision should be taken without reading the fund prospectus and any fund supplement of the fund concerned.


Although the content of the website is based upon information that LIAM consider reliable or comes from sources that LIAM consider reliable, LIAM have not verified such information. Lyxor make no representation or warranty as to the accuracy, completeness or adequacy of any information.  Any reproduction, disclosure or dissemination of the materials available on the website is prohibited.



This website uses cookies to make the website work or improve your user experience. Cookies are small text files that are saved on your computer or device, which are used for several purposes such as detecting preferences and improving site navigation. By continuing to use this website you consent for cookies to be used. For more details, including how to amend your preferences, please read our [Cookies Policy] link to privacy & cookie page.

By clicking on your client type to enter the website, you shall be deemed to have represented to us that you are not a U.S. person and that you are not located in the United States of America, its territories and possessions, and any State of the United States of America and that you are authorised to receive the information to and on this website.

August, 2015





15 Nov 2019

How to achieve precision exposure within EM


In case you missed our recent webinar on ‘Building better EM portfolios’, we’ve recapped some key points made by Fotios Kassianidis, Wealth Consultant at MSCI. He explains the significant structural differences between countries within the ‘EM’ block, and shows how you can tilt your EM portfolio in a meaningful way with some illustrative portfolio case studies.

There are several idiosyncrasies to factor in when building and optimising EM portfolios. As my colleague Jean-Maurice has alluded to, many stem from country choice: out of all of the building blocks of EM exposure, country choice has been the primary source of risk. EM countries all have unique characteristics which investors may choose to take into consideration.  

Country choice is an especially prominent topic at this moment, given the political dynamics between the USA and China. The exact implications of the ongoing trade disputes can’t be exactly quantified, yet we can still model the possible effects around the world based on certain assumptions.

Here we share a few highlights from our stress tests analysing how trade tensions between the world’s economic superpowers could spill over into the emerging markets. 

The structural differences between EM countries 

First, it is important to note that within the ‘EM’ block, there are significant structural differences between countries which are reflected in their equity markets. One indicative difference is varying levels of sensitivity to external market factors. For example, in Figure 1 below we compare the sensitivity of several EMs to the movements of developed markets (DMs) and the oil price sensitivity relative to the overall EM.

We see first that there is a wide range across the countries, and that big commodities producers such as Brazil and Russia are far more linked to DMs and the oil price than other countries.

Figure 1: Oil and Developed Market Sensitivities (relative to EM)1

                  chart 1

For illustrative purposes only. This is not a recommendation.

Interestingly, China has a far lower sensitivity to external fluctuations in the oil market and the world’s developed markets, compared to the EM average (the chart’s baseline). South Korea is in line with the overall EM on these measures, being as sensitive to DM movements and oil moves as broader EM, while Malaysia has minimal sensitivity to oil and slight negative correlation to developed markets.

In Figure 2 below, we get a clearer picture of the exposure of different EMs to the economies of China and the USA specifically. 

Figure 2: Economy Exposure to USA and China1

chart 2

For illustrative purposes only. This is not a recommendation.

China is understandably highly exposed to its domestic economy. Yet nearby Taiwan is more exposed to the USA, as is India, which exports a huge amount of IT services there.

With the knowledge of these differing structural characteristics and others, we can use single EM country indices to rotate portfolios and calibrate against unintended risks, such as a potential spillover coming from the ongoing trade disputes between China and the US. 

EM portfolios according to specific views

Case study 1: Reducing sensitivity to China

In this example we consider a hypothetical investor concerned about the potential impact of US trade actions on the Chinese economy. This investor could overlay single countries with lower volatility and lower reliance on China onto a broad EM allocation. We saw that India had exhibited strong and consistent low volatility bias relative to rest of EM, while Malaysia was characterised by low beta stocks and had a relatively low exposure to China.

When we then added India and Malaysia to an MSCI EM allocation, we saw a significant reduction in nominal exposure to China, and less exposure to the Chinese economy. 

chart 3

For illustrative purposes only. This is not a recommendation.

Case study 2: Overweighting China with a barbell approach

In our second case study example, an investor is looking for a high positive conviction about China’s long-term growth prospects and diversification potential. They may want to benefit from China and other emerging economies, without taking on excess risk.   

In this case they may choose to start with an EM ex-China block, adding separate allocations to single-country China, India and Malaysia. Overall nominal allocation to the three countries would go up, while from an economic exposure point of view there would be some differences with a pure EM index.

From a performance point of view, this portfolio could perform well in both risk-off and risk-on environments, while overall volatility is reduced meaningfully. This is unsurprising given the volatility profiles of India and Malaysia. 

chart 4

For illustrative purposes only. This is not a recommendation

These are just two hypothetical case studies, but they highlight how single-country indices could be used to tilt exposure meaningfully within EM, to take better account of the structural characteristics of different EM countries and build a more targeted and precise exposure to the world’s most dynamic, growing markets.

Fotios Kassianidis, Wealth Consultant at MSCI

1Source: MSCI. Average sensitivities over the last 5 years to the end of August 2019. Exposures based on MSCI GEMLT & EMM1 Risk Models. Past performance is not a reliable indicator of future results.

MSCI disclaimer
The MSCI data contained herein is the property of MSCI Inc. and/or its affiliates (collectively, “MSCI”). MSCI and its information providers make no warranties with respect to any such data. The MSCI data contained herein is used under license and may not be further used, distributed or disseminated without the express written consent of MSCI. MSCI does not issue, sponsor, endorse, market, offer, review or otherwise express any opinion regarding any fund, ETF, derivative or other security.

The view from Lyxor

Our expertise in Emerging Markets goes back to 2005, so if you’re looking to venture off the beaten path, let experience be your guide. Today, Lyxor ETF manages over €5bn in assets, and we offer more than 20 ways to invest, including broad, regional, single country and ESG exposures. We uniquely offer a broad EM ex-China ETF to help you build a more precise allocation towards the superpower.2

Relevant ETFs

2Source: Lyxor International Asset Management, as at 30/09/2019. Number of exposures and assets under management includes Comstage funds. Lyxor’s first Emerging Market ETF was launched on 21/07/2005, the Lyxor China Enterprise (HSCEI) UCITS ETF. Lyxor credentials vs. peers refer to the European UCITS ETF market only.

This article is for informative purposes only and should not be taken as investment advice. The opinions expressed by Fotios Kassianidis are his own, as at October 2019, and do not necessarily reflect the views of Lyxor International Asset Management or Societe Generale. Statements relating to past performance are not a reliable indicator of future results. Capital at risk. Please read our Risk Warning below.

Risk Warning

This document is for the exclusive use of investors acting on their own account and categorised either as “Eligible Counterparties” or “Professional Clients” within the meaning of Markets in Financial Instruments Directive 2014/65/EU. These products comply with the UCITS Directive (2009/65/EC). Société Générale and Lyxor International Asset Management (LIAM) recommend that investors read carefully the “investment risks” section of the product’s documentation (prospectus and KIID). The prospectus and KIID are available free of charge on, and upon request to

Except for the United-Kingdom, where this communication is issued in the UK by Lyxor Asset Management UK LLP, which is authorized and regulated by the Financial Conduct Authority in the UK under Registration Number 435658, this communication is issued by Lyxor International Asset Management (LIAM), a French management company authorized by the Autorité des marchés financiers and placed under the regulations of the UCITS (2014/91/EU) and AIFM (2011/61/EU) Directives. Société Générale is a French credit institution (bank) authorised by the Autorité de contrôle prudentiel et de résolution (the French Prudential Control Authority).

The products mentioned are the object of market-making contracts, the purpose of which is to ensure the liquidity of the products on the London Stock Exchange, assuming normal market conditions and normally functioning computer systems. Units of a specific UCITS ETF managed by an asset manager and purchased on the secondary market cannot usually be sold directly back to the asset manager itself. Investors must buy and sell units on a secondary market with the assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current net asset value when buying units and may receive less than the current net asset value when selling them. Updated composition of the product’s investment portfolio is available on In addition, the indicative net asset value is published on the Reuters and Bloomberg pages of the product, and might also be mentioned on the websites of the stock exchanges where the product is listed.

Prior to investing in the product, investors should seek independent financial, tax, accounting and legal advice. It is each investor’s responsibility to ascertain that it is authorised to subscribe, or invest into this product. This document is of a commercial nature and not of a regulatory nature. This material is of a commercial nature and not a regulatory nature. This document does not constitute an offer, or an invitation to make an offer, from Société Générale, Lyxor Asset Management (together with its affiliates, Lyxor AM) or any of their respective subsidiaries to purchase or sell the product referred to herein.

Research disclaimer

Lyxor International Asset Management (“LIAM”) or its employees may have or maintain business relationships with companies covered in its research reports. As a result, investors should be aware that LIAM and its employees may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Please see appendix at the end of this report for the analyst(s) certification(s), important disclosures and disclaimers. Alternatively, visit our global research disclosure website

Conflicts of interest 

This research contains the views, opinions and recommendations of Lyxor International Asset Management (“LIAM”) Cross Asset and ETF research analysts and/or strategists. To the extent that this research contains trade ideas based on macro views of economic market conditions or relative value, it may differ from the fundamental Cross Asset and ETF Research opinions and recommendations contained in Cross Asset and ETF Research sector or company research reports and from the views and opinions of other departments of LIAM and its affiliates. Lyxor Cross Asset and ETF research analysts and/or strategists routinely consult with LIAM sales and portfolio management personnel regarding market information including, but not limited to, pricing, spread levels and trading activity of ETFs tracking equity, fixed income and commodity indices. Trading desks may trade, or have traded, as principal on the basis of the research analyst(s) views and reports. Lyxor has mandatory research policies and procedures that are reasonably designed to (i) ensure that purported facts in research reports are based on reliable information and (ii) to prevent improper selective or tiered dissemination of research reports. In addition, research analysts receive compensation based, in part, on the quality and accuracy of their analysis, client feedback, competitive factors and LIAM’s total revenues including revenues from management fees and investment advisory fees and distribution fees.

Connect with us on linkedin