Ossiam, the French investment boutique, has entered the London Stock Exchange arena with the launch of two exchange-traded funds, designed to offer an alternative to traditional equity market cap-weighted indices.

The new funds will be UCITS-compliant and include stocks from the S&P 500 and the Stoxx Europe 600.

Ossiam is a subsidiary of Natixis Global Asset Management, which managed €530 billion (about $740 billion) of client assets at the end of March this year.

ETFs have been under fire recently as commentators have argued that the increasing complexity and profusion of the products causes some of them to not live up to client expectations, or even break down. Last month, the UK Financial Services Authority criticised providers for not properly explaining the risks ETFs entail.

Some observers have even suggested a link between ETFs and the “flash crash” in May last year, when 70 per cent of all cancelled trades were reported to be ETFs.

Tom Stevenson from Fidelity International says that ETFs can be a potential minefield for the average investor and imperil overall market stability. He argues that ETFs are best left to sophisticated investors with an understanding of the operation and risks of the product.