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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 AIMED AT CLIENTS IN FINLAND WHO QUALIFY AS PROFESSIONAL CLIENTS OR PROFESSIONAL INVESTORS

This website is published by Lyxor International Asset Management (LIAM), a French asset management company approved by the French Financial Markets Authority (Autorité des Marchés Financiers, 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 on Microsoft Azure servers.

This website is subject to French and Finnish law.

 

A professional client for the purposes of the MiFID (2004/39/EC) and the AIFMD (2011/31/EU) as implemented in Finland is one of the following:

-         an entity required to be authorised or regulated to operate in the financial markets. The following list includes all authorised entities carrying out the characteristic activities of the entities mentioned, whether authorised by an EEA State or a third country and whether or not authorised by reference to a directive:

·            an investment firm, a credit institution, a fund management company, an alternative investment fund manager, a depositary;

·            a stock exchange, an options exchange, a clearing entity;

·            a central securities depository;

·            an insurance company, a pension insurance company, a pension fund;

·            an entity that deals exclusively on own account in financial derivatives for the sole purpose of hedging positions on derivatives markets or deals for the account of other members of those markets or makes prices for them and is guaranteed by clearing members of the same markets;

·            a business entity dealing in commodities and/or commodity derivatives on own account;

·            any other institutional investor;

 

 

-          a large undertaking, meeting two of the following size requirements according to the financial statements of the last preceding financial period:

 

·            balance sheet total of at least EUR 20,000,000

·            net turnover of at least EUR 40,000,000

·            own funds of at least EUR 2,000,000

 

-         the State of Finland, the State Treasury, the province of Åland, foreign national and regional governments as well as foreign public bodies managing public debt;

-         the European Central Bank, the Bank of Finland and similar foreign central banks as well as the International Monetary Fund, the World Bank and similar international associations and organisations;

-         institutional investors that, as their main field of activity, invest in financial instruments;

-         other clients that have in writing requested to be treated as a professional client and, after having received written information on the limited protection afforded to professional clients confirmed in writing their understanding of the same, provided that the investment firm has assessed that the client is capable of making independent investment decisions and understands the related risks and, furthermore, that the client meets at least two of the following criteria:

·            the client has carried out transactions, in significant size, on the relevant market at an average frequency of 10 per quarter over the previous four quarters;

·            the size of the client’s financial instrument portfolio exceeds EUR 500,000;

·            the client works or has worked in the financial sector for at least one year in a professional position, which requires knowledge of the transactions or services envisaged.

 

A professional investor for the purposes of the UCITS (2009/65/EC) as implemented in Finland is one of the following:

-         an entity required to be authorised or regulated to operate in the financial markets, as defined above under ‘professional client’;

-         a large undertaking, meeting the requirements set out above for professional clients

-         the State of Finland, the State Treasury, the province of Åland, foreign national and regional governments as well as foreign public bodies managing public debt;

-         the European Central Bank, the Bank of Finland and similar foreign central banks as well as the International Monetary Fund, the World Bank and similar international associations and organisations;

-         institutional investors that, as their main field of activity, invest in financial instruments;

-         other investors that have notified the fund management company, UCITS or its representative in writing that they, on the basis of their expertise and experience in investing activities, are professional investors, and meet at least two of the following criteria:

·            the investor has carried out transactions, in significant size, on the relevant market at an average frequency of 10 per quarter over the previous four quarters;

·            the size of the investor’s financial instrument portfolio exceeds EUR 500,000;

·            the investor works or has worked in the financial sector for at least one year in a professional position, which requires knowledge of the transactions or services envisaged.

 

The above definitions are only extracts and are as such not exhaustive. For further details please refer to the Finnish Investment Services Act (747/2012) and the Finnish Investment Funds Act (48/1999).

 

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 French law and approved by the Autorité des Marchés Financiers (the French Financial Markets Authority), or (ii) established under Luxembourg law and approved by the Commission de Surveillance du Secteur Financier (the Luxembourg Financial Supervisory Committee). Most, if not all, of the protections provided by the Finnish regulatory system generally and for funds authorised in Finland do not apply to these exchange traded funds (ETFs). In particular, investors should note that holdings in this product will not be covered by the provisions of the Financial Services Compensation Scheme or by the Finnish Investors’ Compensation Fund.

 

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”), the Finnish Investors’ Compensation Fund 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.

 

Tax

 

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 www.lyxoretf.fi. 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 makes 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.

 

Cookies

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 confirm that you qualify as a ‘professional client’ or ‘professional investor’, as set out above and 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 otherwise authorised to receive the information to and on this website.

 

 

I CONFIRM THAT I HAVE READ AND UNDERSTOOD THE IMPORTANT INFORMATION THAT IS CONTAINED ABOVE AND ACCEPT THE TERMS OF THE PRIVACY AND COOKIES POLICY.

11 Jun 2021

Podcast: Banking on a greener future, with Danske Bank and Climate Bonds Initiative

We’re excited to announce a brand new investing podcast, One Step Ahead, brought to you by Lyxor ETF.

New technologies and the global drive towards a sustainable life are quickly reshaping how we travel, work, and play. One Step Ahead is a new podcast in which business leaders and industry disruptors break down how they're adapting to the latest trends, preparing for what's next, and helping to build a brighter future for our planet. We hope you enjoy hearing their perspectives.

Remember: this podcast is for informational purposes only and should not be taken as investment advice and/or an offer to buy financial products.

In our first episode, former BBC journalist Libby Potter investigates the booming green bond market, digging into some real-life case studies of the eco-friendly projects they fund. She’s joined by Sean Kidney, CEO and co-founder of the Climate Bonds Initiative, and Samu Slotte, Global Head of Sustainable Finance at Danske Bank.

Sean and Samu gave their honest take on the urgent need to tackle the climate emergency, and the crucial role investors must play to enact change. Samu also gave concrete examples of green projects financed by Danske Bank’s green bonds, ranging from green buildings, to electric transport, to renewable energy. 

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Sean Kidney is CEO and co-founder of the Climate Bonds Initiative, an international NGO working to mobilise global capital for climate action. Projects include a green bond definitions and certification scheme with $34trn of assets represented on its Board; working with the Chinese central bank on how to grow green bonds in China; and market development programs in Brazil, Mexico, ASEAN and Africa. He was member of the 2017 EU High Level Expert Group on Sustainable Finance and a member of its successor, the EU Technical Expert Group on Sustainable Finance. Sean’s dedication to the cause has awarded him ‘Personality of the year for Green Bonds’ by Environmental Finance, as well as 'King of green bonds' by the FT.


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Samu Slotte is Global Head of Sustainable Finance at Danske Bank, with the overall responsibility for ESG integration in Danske Bank’s Large Corporates and Institutions unit. His responsibilities include both integration of ESG risk assessment in the lending portfolios as well as supporting the bank’s clients in their transition to more sustainable business models via green and sustainable finance. His team is also responsible for developing the metrics for Danske Bank’s commitment to set a Paris aligned climate target for the corporate lending portfolio.

Below are a few edited highlights from the episode. You can listen to the full episode on your favourite podcast platform (Spotify, Apple Podcasts, Google Podcasts, Stitcher) or right here on the Lyxor ETF website:


Why are sustainable issues so important right now?

Sean: It's pretty straightforward. We have an existential crisis! We are looking down the track at a freight train coming towards us, and by that I mean climate change. If you speak to a climate scientist—good luck finding one that's willing to speak to you because we've been ignoring them for the last 30 years—they will tell you that we have an extraordinary challenge to face: we’re looking at the wholesale destruction of the way we run our world, our society, and economy, because we have been travelling on the worst possible trajectory of climate change for the last 30 years. Some of the scientists I speak to are very depressed.

Samu: I think Sean explained what this is all about very well. We are facing existential threats, both from climate and biodiversity. There are a number of ways we can address this. Consumer behaviour needs to change. Policy needs to change. But clearly also the financial markets have a huge role to play. We need to redirect capital. Capital allocations are really important for the transition to more sustainable societies. We know what needs to be done and we need to act on all of these three fronts, both as consumers in policy and in the financial markets. 

Samu, Danske Bank partnered with the CBI a few years ago to launch a green bond. What green initiatives have been made possible with the proceeds of this and subsequent green bonds?

Samu: For a bank, when we see a green bond, we commit to give out green loans on the other side of the balance sheet, which then match those terms that we've set in the bond. […] If we look at the pool of green loans financed with the green bond issuance, about 50% is green and energy-efficient buildings, a large part is renewable energy, and clean transportation. We're mostly active in the Nordics. Much of our lending is in the Nordic countries. And if we look at which type of projects take place in Denmark, Sweden, Norway or Finland, it's very representative of what needs to happen in the real economy across the entire region. Buildings consume a lot of energy, particularly in our part of the world where heating is so important. That all needs to be decarbonised. But we also need to bring down the energy consumption of buildings. Buildings consume a lot of energy, and the less they consume, the less need there is to produce that with fossil fuel-produced heat and power. We're seeing green loans to real estate across the region.

But then here's where the country specific differences kick in. We've seen in Norway, for instance, projects on green, electrified transportation – one example would be financing to a company called Torghatten for electrified ferries. Then in terms of renewable energy, one interesting project would be an offshore wind park, Dogger Bank in the North Sea. I think it's going to be the world's largest offshore wind park, 3.6GW [gigawatts]. That's the equivalent of providing power to six million households.

How does the CBI taxonomy set standards for what constitutes a true green project?

Sean: Well, it's simple in a way. Read the scientist reports and avoid reading the government reports that are mediated by politics. It's as crude as that. […] There’s a continual watering-down of climate ambition through the political process, unfortunately. […] We go to the scientists and we say, tell us what the issues are, what are we going to do? And we translate that into criteria. When an investor or a bank uses carbon certification criteria, it is what the science is saying, translated into a binary tool that can be used in financial markets.

In a recent edition of The Economist, there was a comment on the EU taxonomy, which seemed to suggest that it couldn't work without better disclosure. Is corporate disclosure key to all of this?

Samu: Hmm. Yeah, of course we need disclosure, but we shouldn't wait for that to get going. I think everybody needs to accept that the taxonomy is not complete and in its final form yet – but we still start using it. Of course, there will be data gaps. I think the important thing is just to explain where the gaps are, and how we manage that and wait for full disclosure to improve. We can't sit around and just wait for more disclosure. We can get going with what we have now. 

one step ahead

Catch up on the full inaugural episode of One Step Ahead to hear the rest, including:

  • Different projects made possible with the proceeds of Danske Bank’s green bond
  • Why Nordic countries are ahead of the pack on the switch to green
  • The best way for listeners to keep up to speed with these topics

Many thanks to our first podcast guests, Sean and Samu, and host Libby. We hope you’ll join us in upcoming episodes for more exclusive and unfiltered expert insights on the future of the planet – and how we can invest in a better future. 

Final thought 

The day is coming when a company’s fortunes will depend on the size of its carbon footprint, the global warming scenario it implies and its willingness to address broader societal issues, just as much as ordinary financial metrics. The best investment decisions keep this bigger picture in mind.

Our SFDR 9 compliant Lyxor Green Bond (DR) UCITS ETF offers a simple way for investors to take direct climate action in their fixed income portfolios. You can also learn about the impact green bonds like Danske Bank’s had in our 2020 impact report.

Learn more about Green Bond ETFs

This podcast is for informational purposes only, and should not be taken as investment advice and/or an offer to buy financial products. Lyxor International Asset Management, holding the brand Lyxor ETF, does not in any way endorse or promote any companies or securities mentioned in this show. The opinions expressed at the time of recording do not necessarily reflect the views of Lyxor ETF or its parent company, Societe Generale, and may vary from time to time.

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 www.lyxoretf.com, and upon request to client-services-etf@lyxor.com.

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). Lyxor International Asset Management (LIAM) is registered in the public register of the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten) as a manager (beheerder) of a UCITS. 

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 www.lyxoretf.com. 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 www.lyxoretf.com/compliance.

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.

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