Traded Fund investment set for London launch

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The Independent Online

A new type of investment which looks like a unit trust but can be bought and sold like a share arrives on the London Stock Exchange on 28 April.

Britain's first Exchange Traded Fund (ETF), the iFTSE 100, will be launched by iShares, an Ireland-based independent investment company. It will be managed by Barclays Investment Management.

It offers investors the advantages of a wide exposure to the largest companies in the UK market through the FTSE 100, as well as ease of dealing. John Demaine, director of iShares, said: "We expect to launch 10 or 12 funds in the market within the next 12 months."

ETFs resemble unit trusts, which pool a range of shares. But iFTSE will have no start-up costs and the expense of buying and selling will not exceed that of dealing in ordinary shares.

The iFTSE fund will be free from stamp duty, and annual charges will total about 0.4 per cent a year. It will be listed on extraMARK, a new market created for ETFs and other new investment products.

Mr Demaine expects initial capital to be about £50m. The shares will be valued at £10 when they launch next week.