Fees slashed on Irish equities fund

A low cost fund offering investors the ability to access the largest names on the Irish stock market was re-launched on Monday.

European ETF specialist Wisdom Tree, which has some $60 million in assets under management, has taken over the running of the Iseq 20, which was originally launched in 2007.

Hector McNeil, co-CEO of WisdomTree Europe, says that the index is “a bit of a sleeping giant”, and he expects that the ETF, in its revitalised format, will appeal to both domestic and international investors looking to access the Irish market without having to access individual stocks.

The WisdomTree ISEQ 20 represents the 20 most liquid and largest capped equities on the Irish Stock Exchange, with CRH the largest stock. Other names include Bank of Ireland, Ryanair and property investment companies Green and Hibernia.

Initially launched back at the peak of the market in 2007, the product had been run as a stand-alone ETF product by Investec, but bringing it into the fold of a larger ETF specialist is good news for investors, as annual charges have decreased considerably. Total annual charges on the fund have fallen to 0.49 per cent, from about 1.3 per cent previously.

The fund currently has €29 million in assets under management, down from about €80m at the peak, but McNeil,who helped launch the product during his time with market maker Susquehanna in Dublin, says the fund has the potential to reach € 150m.

Although still off its highs, the Iseq 20 has performed strongly in recent years, out-performing other indices, and is up by 20.1 per cent so far in 2015.

In its promotional documentation, Wisdom Tree says that the valuations of Irish equities are favourable, if not somewhat discounted.

The ETF is also now considerably less skewed towards financials. Back in 2007, financials, by market capitalisation, accounted for more than 40 per cent of the fund. Now, in the absence of Anglo Irish Bank and AIB, it has shrunk to slightly more than 10 per cent.