Source announced today the launch of nine new US equity sector ETFs.

The ETFs will track new versions of S&P’s select sector indices, with individual constituent weights capped at 20% in order to ensure compliance with Europe’s UCITS regulations.

The US equity sectors to be tracked are consumer discretionary, consumer staples, energy, financials, health care, industrials, materials, technology and utilities.

The new funds will be listed on the London Stock Exchange and carry a total expense ratio of 0.30% per annum.

The ETFs will use swap-based replication to track their indices.  Source operates an “open architecture” platform, under which BofA Merrill Lynch, Goldman Sachs, Morgan Stanley and Nomura are the swap providers and Nyenburgh, AllOptions, Banca IMI, IMC Group, Flow Traders and Unicredit are the key market makers.

In a press release to accompany the fund launch, Source points out that US sector ETF assets under management currently total US$76 billion, representing 12% of the overall US ETF market. Due to restrictions on the holding or trading of US-listed funds, many European investors have not been able to access this market and its accompanying liquidity, Source argues.

Source launched its own version of European equity sector indices, the STOXX 600 Optimised Supersector ETFs, in July 2009.  These ETFs had a total of €930 million under management on 24 December, according to the Blackrock ETF Landscape DJ Stoxx 600 Sector Net Flows report.

According to the 24 December Deutsche Bank ETF Liquidity Trends report, Source had €2.13 billion in exchange-traded product assets under management, ranking the issuer twelfth amongst European providers.