Update to European fund in your portfolio FAQ

Posted by Simon Moore on July 25

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Why is this change happening?

The Lyxor Core EURO STOXX 300 GBP Hedged UCITS ETF is being delisted. This means it won’t exist anymore and all holdings are being sold, leaving you with extra cash in your account. Buying the iShares Core MSCI EMU ETF puts that cash back to work in the stock market for you.

Does this effect ethical portfolios?

No. This ETF was only in standard portfolios so it doesn't effect Moola ethical portfolios.

What’s the difference between the two funds?

They are similar. Both hold hundreds of European companies and hedge currency risk. The proposed iShares fund is recently introduced and is slightly cheaper to own and trade on our estimates.

If the new fund is better, why wasn’t I offered it previously?

It was introduced relatively recently and we wanted to evaluate how it performed in terms of absolute performance and asset growth. We would have expected to include it as part of the next portfolio rebalance, but since the alternate fund is being delisted, we’re proposing the switch now.

Why is the Lyxor Fund being delisted?

Lxyor periodically evaluate the funds they offer and decided to delist several of their funds. Moola was not involved in this decision, but it means we can no longer use the fund.

Is delisting a problem?

No, it simply means the fund’s holdings are sold and the cash is returned to investors. However, if you don’t do anything having extra cash in your account could reduce your long-term returns when compared to investing. That’s why switching to a replacement fund could make sense.

Why does this only impact my European holdings?

It just so happens that it’s a European fund where we’re proposing a change. As a Moola customer you still hold shares all over the world, not just in Europe.

Is this a rebalance?

No, this isn’t a full rebalance, we’re primarily changing one fund in the portfolio. Normally with rebalances we change more than one fund and may change asset target weights in the portfolio.

Is this related to the UK's negotiations to leave the European Union (Brexit)?

No, this is unrelated to Brexit.

 

Written by Simon Moore

Simon is responsible for investing and related content at Moola. He was previously CIO of FutureAdvisor, a US digital advisor. His most recent book Digital Wealth, explains automated investing. He studied economics at Oxford, and completed his MBA at the Kellogg School of Management.

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