Amundi expands its Core range on the London Stock Exchange

Amundi is today listing a new synthetically replicated equity ETF focused on the US market on the London Stock Exchange, with one of the lowest total annual fees in the entire segment.

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Article created by the editorial staff of ETFWorld.co.uk

Benoit Sorel Global Head of ETF, Indexing & Smart Beta Amundi ETF

The fund is the Amundi Core MSCI USA Swap UCITS ETF Acc (ISIN LU3332965949), which joins the French issuer’s already extensive range of North American equity products. The product has a total annual expense ratio (TER) of 0.05% and is a reinvestment class.

The London listing follows just one day after the fund’s debut on Xetra, where it was admitted to trading on 21 July 2026 in two accumulation classes, one of which is hedged against euro exchange rate risk. The rapid alignment of the main European trading venues confirms the ‘pan-European’ approach with which Amundi is expanding its Core range.

Positioning: Amundi’s Core range

The Core range represents the lowest-cost segment of Amundi’s offering, designed to serve as the ‘building blocks’ of an asset allocation strategy: broad exposures, globally recognised benchmarks and fees kept at market lows.

In the US and global equity segments, the range already includes some of the largest products in Europe: the Amundi Core S&P 500 Swap UCITS ETF Acc (LU1135865084), which also has a TER of 0.05% and assets under management in excess of €15 billion, the Amundi Core MSCI World Swap UCITS ETF and the Amundi Core MSCI Emerging Markets Swap UCITS ETF (TER 0.14%). These are joined by the physically replicated version of the MSCI USA exposure, the Amundi Core MSCI USA UCITS ETF, domiciled in Ireland.

The new addition therefore completes the picture, offering investors and advisers the choice between two replication mechanisms for the exact same benchmark — a choice which, as we shall see, is by no means neutral in tax terms.

The investment objective

The fund’s stated objective is to replicate as faithfully as possible, in both rising and falling markets, the performance of the MSCI USA Net Total Return USD Index, whilst minimising the tracking error between the fund’s net asset value and the index’s performance.

The reference to the Net Total Return version of the index is not a trivial technical detail: this is the variant that reinvests dividends net of withholding tax applied to a non-resident international investor. It is the benchmark against which the fund’s performance must be measured — and, as we shall see, it is also where synthetic replication derives its structural advantage.

The benchmark: what the MSCI USA measures

The ETF tracks the performance of the MSCI USA Index, one of the world’s most widely used benchmarks for US equities. The index is designed to track the performance of the large- and mid-cap segments of the US market and, according to the latest available MSCI factsheet (data as at 29 May 2026), comprises 536 constituents, covering approximately 85 per cent of the free-float-adjusted market capitalisation of the US market. The index was launched on 31 March 1986.

Compared with the S&P 500, the MSCI USA offers a broader basket in terms of the number of constituents, with a more pronounced mid-cap component and a purely quantitative selection criterion (market capitalisation and liquidity), without the discretionary element of the committee that oversees the S&P Dow Jones index. In terms of historical returns, however, the two indices perform in an extremely similar manner, given the almost total overlap in terms of market capitalisation weightings.

The figure that deserves the most attention from investors is the degree of concentration. The top ten stocks in the index account for a combined 38.36%: NVIDIA (7.79%), Apple (6.96%), Microsoft (4.83%), Amazon.com (3.95%), Alphabet A (3.36%), Broadcom (3.06%), Alphabet C (2.78%), Meta Platforms A (2.09%), Tesla (1.87%) and Micron Technology (1.66%). With the technology sector alone accounting for nearly 40 per cent of the index, exposure to the MSCI USA is now, in effect, a bet heavily concentrated on the US tech sector and the artificial intelligence value chain.

In terms of valuations, the factsheet shows a price-to-earnings ratio of 28.27 (21.72 based on expected earnings), a price-to-book ratio of 5.86 and a dividend yield of 1.11%. As for historical performance (gross returns in US dollars as at 29 May 2026), the index has delivered a 12-month return of +29.31 per cent, a three-year annualised return of +23.71 per cent and a ten-year annualised return of +15.63 per cent. In terms of risk, the three-year annualised volatility stood at 13.50%, whilst the highest historical drawdown on record remains that of the 2007–2009 period, at 54.91%.

The mechanism: why a swap on the US market

The sub-fund employs synthetic replication via swap contracts. In a nutshell, the fund holds a basket of assets (the so-called substitute basket, typically consisting of liquid equities from developed markets) and swaps the return on this basket for the return on the benchmark index with one or more authorised counterparties. UCITS regulations require that net exposure to a single counterparty must not exceed 10 per cent of the fund’s assets, a limit typically managed through frequent contract resets and multi-counterparty structures.

The reason why this structure is particularly widespread in the US equity market is essentially fiscal. A fund that physically holds US shares is subject to withholding tax on dividends: 15 per cent for vehicles domiciled in Ireland, which benefit from the tax treaty between the United States and Ireland, but up to 30 per cent for Luxembourg-based vehicles, which do not benefit from that treaty. Synthetic replication, by contrast, allows the gross return of the index to be achieved under certain conditions, thereby avoiding the withholding tax on dividends.

With the MSCI USA dividend yield standing at around 1.1%, the spread between the gross and net versions of the index currently stands at around 30 basis points per annum for a physically replicated Luxembourg fund, and around half that for an Irish fund. It is precisely this margin that the swap structure makes it possible to recoup, net of the fee paid to counterparties — a fee that absorbs part, but not usually all, of the benefit.

The fact that the sub-fund is domiciled in Luxembourg (as indicated by the ISIN code LU) and uses the swap is therefore no coincidence: it is this combination that enables Amundi to offer the most tax-efficient exposure whilst keeping the fund within its own Luxembourg platform, whereas the physically replicated version of the same index remains domiciled in Ireland.

It should also be noted that this advantage has a downside: the investor is buying units in a fund whose performance depends on the successful outcome of the swap contract, not on direct exposure to the securities physically held in the portfolio. The substitute basket acts as collateral; the final return is determined by the swap mechanism. The counterparty risk is mitigated by UCITS regulations and the collateralisation, but it is not eliminated entirely.

The cost: 0.05% and the price war on US equities

With an annual TER of 0.05%, the Amundi Core MSCI USA Swap sits on the efficient frontier of costs for exposure to US equities.

This segment is, after all, one of the most competitive in Europe.

However, a methodological caveat remains necessary: for products with such compressed costs, the TER now accounts for only a minor fraction of the difference in returns between one fund and another. The variables that really matter are the actual tracking difference (which incorporates tax treatment, swap fees and any income from securities lending), the bid-ask spread on the secondary market and the depth of the order book. For a newly listed ETF, this last aspect should be monitored during the first few weeks of trading, whilst the fund’s assets are still being built up.

Source: ETFWorld.co.uk