London & Capital founds ETF specialist

London & Capital Investment Management has launched its own exchange-traded fund (ETF) firm because it believes that London is set to emerge as a location of choice for the vehicles.

London has become a serious option for ETF listings since the Inland Revenue lifted stamp duty on them in March. Their marketing throughout Europe has also been aided by the introduction of Ucits III.

London & Capital’s new firm, Spa ETF International, will launch six ETFs in the next two months and a further 12 over the next two years.

The ETFs will be run on quant indices provided by US research group MarketGrader, with whom it has signed exclusive global rights.

Spa believes the selling point of these ETFs is that they have a series of self-imposed restrictions to prevent any one economic sector predominating, which it said will prevent them from being affected by market crashes, unlike the FTSE indices.

Three of the new ETFs will focus on the top 40, 100 and 200 stocks in the US market respectively, while another three will focus on more traditional large, mid and small-cap stocks.

Daniel Freedman, managing director of London & Capital and director of Spa ETF, said: ‘In the US there has been a massive range of issues but in Europe it’s all about to kick off.’