HSBC enters European ETF market
HSBC unveils first in a planned suite of ETFs
HSBC today announced it will launch, on 25 August 2009, the HSBC FTSE 100 ETF, the bank’s first European Exchange Traded Fund (ETF). Listed on the London Stock Exchange, the new ETF (ticker: HUKX) is designed to track the performance of the FTSE 100 index.
The HSBC FTSE 100 ETF, domiciled in Ireland, is registered for sale in the UK and a number of additional registrations are planned across Europe. HSBC Global Asset Management will be the investment manager and HSBC Global Markets will ensure liquidity as a market maker. The total expense ratio will be 0.35%.
ETFs have gained ground over the past few years in step with investors’ demand for simpler, more flexible, risk controlled and good value investment products. ETFs represent around 2% of the European mutual fund market compared with 6% in the US*. HSBC envisages substantial growth as they become an important part of the investment toolkit for all types of investor.
“We are intent on complementing our existing set of investment capabilities by developing a range of ETFs that can meet the main investment requirements of the institutional, wealth management and retail segments,” said Mark McCombe, Chief Executive Officer of HSBC Global Asset Management.
“ETFs are one of the fastest-growing areas in the investment management industry and we aim to be among the leading providers within a few years,” said Samir Assaf, Head of Global Markets at HSBC. “By leveraging the capabilities of the HSBC Group in fund management, market making, custody and fund administration, we are confident we can progressively build a strong suite of ETFs.”
HSBC’s entry into the European ETF market complements its business in Asia, through Hang Seng Bank, majority owned by HSBC, and HSBC Global Asset Management in Hong Kong. Together they have almost 8% of the regional ETF assets under management. On 14 August 2009, Hang Seng Bank’s ETFs became the first Hong Kong-listed funds to also be listed in Taiwan. Globally, HSBC is a well-established provider of services to the ETF industry, principally as a custodian and market maker.
Beyond Europe, HSBC plans to leverage its global capabilities to extend its ETF business across Asia, Latin America and the Middle East.
*As at end May 2009, European data source is EFAMA and BGI; US data source is ICI
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