An exchange-traded fund that acts as a money market is set to launch in Spain on Thursday.

The Lyxor Euro Cash ETF (CSH) already lists on exchanges in France, Germany and Italy. It's designed to track the EuroMTS Eonia Investable Index and is expected to carry an expense ratio of 0.15%.

For years, Spain has been the home of high-priced mutual funds, including indexed portfolios carrying hefty loads. But with the addition of CSH, the Bolsas y Mercados Españoles (BME) will have 27 total ETFs trading in Spain. 

Although that might not sound like much by American standards, that total represents a true sea change for investors, who finally are starting to gain a greater degree of choice in terms of low-cost fund options through ETFs.

By all apparent signs, they've been taking full advantage. The BME now estimates that transactions involving ETFs jumped in the opening two months of 2008 by more than five times from the same period last year.

That's a fairly robust growth considering the Spanish exchange's ETF segment started in July 2006. It actually started licensing products earlier that same year.

(For more information on the history of ETFs in Spain, see the related article here).

The index for CSH is calculated by the daily overnight rate for deposits in a sampling of unsecured lending transactions at 57 euro zone banks. The ETF can be invested in swaps and other futures instruments, but a ceiling of 20% is normally placed on securities issued by any single name.

"By assumption the fund, since it is directly exposed to the money market rate through an OTC swap contract, has a very low interest rate risk," said the ETF's prospectus.

Through March 25, Lyxor Euro Cash (CSH) had gained 1.97% in the past six months and nearly 1% in the last three months, according to the Euronext exchange's figures.

Lyxor Asset Management is a wholly owned subsidiary of French banking giant Société Générale. Lyxor manages (euro) $69.9 billion and focuses on alternative investments, structured funds and index tracking. It also says it has more than (euro) $21 billion in ETF assets under management.