ALL EYES ON ETFs

fionaname1.jpgHSBC has become became the latest firm to announce its entry into the European ETF market. The bank has launched an ETF based on the FTSE 100 that is domiciled in Ireland and listed on the London Stock Exchange. It is registered for sale in the UK and further registrations in a selection of mainland European countries are planned.

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.”

The European product range will complement the bank’s existing range of ETFs in Asia run by Hang Seng Bank, which is majority-owned by HSBC, and HSBC Global Asset Management in Hong Kong.  Together these two entities control just under 8% of ETF assets under management in Asia

HSBC clearly sees ETFs as an important string to its bow in an evolving asset management market. Interestingly, it plans to target retail as well as institutional investors with its new ETF range.

“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, CEO of HSBC Global Asset Management.

The launch of HSBC’s new European ETF range comes at a time when the European ETF market is expanding particularly rapidly. A fund market insight report released last week by the research firm Lipper shows that, in a favourable stock market environment, assets under management (AUM) in the pan-European ETF segment grew by 12% in the second quarter of 2009 to reach €123.6bn at 30 June 2009.

The report also says that average monthly turnover was up 34.7% in the second quarter from €22.1bn to €29.8bn. Additionally, there was a large number of ETF launches in the second quarter with 53 new products brought to market.

Fiona Rintoul, editorial director
©2009 funds europe