Ossiam has introduced an ETF share class of its €130m Luxembourg-domiciled money market fund providing exposure to short-term euro interest rates.

The Ossiam Serenity Euro ETF (SNTE) is listed on Deutsche Boerse and has a total expense ratio (TER) of 0.15%.

The fund seeks to replicate the performance of the Solactive €STR +8.5 Daily Total Return index which reflects the short-term Euro interest rate plus an adjustment of 8.5 basis points.

SNTE uses synthetic replication, meaning it exchanges the performance of a substitute basket with the returns of the index using total return swap contracts with one or more investment banks.

The French asset manager has used synthetic replication for various products since 2011, with the structure staging a comeback in certain areas after falling out of favour during the ‘replication war’.

SNTE tracks the same index as the Xtrackers II EUR Overnight Rate Swap UCITS ETF (XEON) which passed the €10bn milestone in August 2024 as investors capitalised on higher rates as central banks began their rate-hiking cycles