Credit Suisse To Change Tracking Method And Introduce Swap Charges

Last Updated: 13 April 2024

Credit Suisse has announced that it is changing the replication method used by four of its ETFs from synthetic to physical, effective from November 3. At the same time, the firm said it will also begin levying a swap-related charge on investors in its remaining synthetic funds.

The four ETFs that will be switching to physical replication are the MSCI Australia, MSCI Brazil, MSCI Mexico Capped and MSCI South Africa funds.

After the switch, there will be 12 remaining synthetic ETFs in the Credit Suisse range, with the rest of the company’s funds using physical replication. The issuer said it believes that physical replication provides a clear advantage to investors, giving them the benefits of transparency and quality.

The issuer’s synthetic ETF range was launched in August last year. At the time, Credit Suisse said: “In the case of more complex country indices such as individual emerging markets, it is often difficult, if not impossible, for investors to gain access to direct investments. Synthetic replication now allows less liquid indices to be replicated accurately and efficiently.”

The decision to levy a spread charge on the bank’s remaining synthetic ETFs reflects the passing on of costs incurred by the ETFs’ swap counterparty, according to the bank. These costs will be reflected in funds’ net asset values, said Credit Suisse, meaning that they will increase funds’ tracking error. The bank has not disclosed how much it expects to charge for swap provision, but said it will publish the information on its website in due course.

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  • Luke Handt

    Luke Handt is a seasoned cryptocurrency investor and advisor with over 7 years of experience in the blockchain and digital asset space. His passion for crypto began while studying computer science and economics at Stanford University in the early 2010s.

    Since 2016, Luke has been an active cryptocurrency trader, strategically investing in major coins as well as up-and-coming altcoins. He is knowledgeable about advanced crypto trading strategies, market analysis, and the nuances of blockchain protocols.

    In addition to managing his own crypto portfolio, Luke shares his expertise with others as a crypto writer and analyst for leading finance publications. He enjoys educating retail traders about digital assets and is a sought-after voice at fintech conferences worldwide.

    When he's not glued to price charts or researching promising new projects, Luke enjoys surfing, travel, and fine wine. He currently resides in Newport Beach, California where he continues to follow crypto markets closely and connect with other industry leaders.

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