BlackRock is expanding its Plan d’Epargne en Actions (PEA) compliant exchange-traded fund range targeting French investors with the launch of a synthetic S&P 500 ETF.

The iShares S&P 500 Swap PEA UCITS ETF (SPEA) is listed on Euronext Paris with a total expense ratio of 0.1%.

SPEA tracks the S&P 500 Net TR Index in EUR index, which is a Euro-denominated version of the index tracked by the iShares S&P 500 Swap UCITS ETF (I500).

SPEA is eligible for the PEA, a French tax-advantaged investment account available to French residents.

It offers tax benefits on capital gains and dividends if the investments are held for at least five years.

Normally, PEAs only allow investment in European Union-domiciled equities, so funds tracking non-European indices use swap-based replication to maintain PEA compliance.

Like I500, SPEA captures the top 500 stocks from U.S. companies in leading industries of the U.S. economy.

SPEA does not pay withholding tax on dividends, as the substitute basket of the ETF is restricted to non-dividend-paying stocks.

SPEA continues the U-turn carried out by the world's largest manager and its previous stance against synthetic ETFs after it launched a swap-based MSCI world ETF that was PEA-eligible in April last year.

The iShares MSCI World Swap PEA UCITS ETF (WPEA) is listed on the Euronext Paris with a total expense ratio of 0.25%.

The ETF tracks the MSCI World Net TR Eur index, a euro-denominated version of the index tracked by the iShares MSCI World Swap UCITS ETF (IWDS), which launched in March.

WPEA offers exposure to 1,480 equities across 23 developed market countries.

It operates an unfunded swap model where a counterparty pays the index total return in exchange for a swap fee.

This article was originally published at etf.com sister publication ETF Stream.

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