To retain its edge in the increasingly competitive ETF marketplace, Amundi ETF brings select products to market that are innovative yet not overly complex.
Simple, cheap, transparent – Amundi ETF aims to be creative and innovative in the products it brings to market, but the firm always keeps the basic premise of exchange-traded funds at the forefront of its development.
Amundi ETF managing director Valérie Baudson says: “Our innovation has focused on creating products that are transparent and liquid, which are key elements of ETFs. You can be innovative without launching products that are too exotic or without adding complexity.”
She gives the example of the ETF on the MSCI World Ex-Europe index. “This was a very simple idea, but it was new. And since no-one was doing it, it was innovative,” Baudson says.
Another of Amundi’s unique products was the ETF on the Nordic region and the full range of products that allows investors to have short exposure to government bonds with several buckets of maturities so that investors can easily implement their curve strategies.
“There were short equity products but no short fixed income ETFs, so we launched a full range of short euro govvies ETFs as well as a full range of short US treasuries ETFs,” Baudson says. “Again, this innovation
was not complicated. The technique existed in equities but hadn’t yet been applied to fixed income and therefore we saw an opportunity.”
She says that although these ideas were client driven, it doesn’t really matter where the ideas come from.
“The important thing is that the products we create are liquid and transparent and for us this is a decisive factor before launching anything.”
Looking back at the past year, Baudson says there has been a lot of change within the Amundi ETF range.
“We launched our ETF business at the end of 2008 and therefore last year was definitely the year of product development with the objective of building up a comprehensive range including the main asset classes, investment styles and geographic exposures. This strategy has been sustained during 2010,” she says.
“This year, we have implemented a dual approach: on one hand, we have continued to grow the number of products in the range, which now comprises nearly 100 ETFs and, on the other, we have developed our presence across Europe, including Germany, Italy, Switzerland and The Netherlands. This puts us in a strong position as a pan-European player and we plan to build on that,” she says.
The most recent additions to the range launched in early December enhance the emerging market series with global emerging equity and global emerging debt exposures. Amundi ETF already provides access to China, India, Brazil and Eastern Europe, but these two new products allow investors a broader exposure to high-growth economies. The first one tracks the flagship MSCI Emerging Markets Index at a very competitive cost of only 0.45%.
The second ETF allows simple and cheap access to the emerging bonds market in a favourable market context. It offers unique exposure to the Markit iBoxx USD Liquid Emerging Markets Sovereigns Index, composed of US-denominated debt securities from around 20 emerging countries.
“Amundi will continue to list new products over the next year,” Baudson says, “but the firm will not be launching funds just for the sake of it.”
Competition in the ETF market has undoubtedly increased and Amundi is one of the newer players, though not the newest by any account.
When it comes to competition, Baudson says: “There is fierce competition in the ETF market and we are one of those competitors. This is good because there was a time when the market was too concentrated.
“We’ve benefited from the more open market. Our aim in 2008 was to play with the big guys. We wanted to make our way to the top end of the market. And we achieved this. We’re now fourth in terms of product range and one of the fastest-growing ETF providers in Europe.”
Amundi ETF has more than 90 ETFs and over €5bn in assets under management, as at the end of September 2010. The firm’s suite of products covers all asset classes and geographical exposures.
In a world where reputation is becoming more important, Amundi ETF is asserting the message it wants to get across to the market through its branding.
“Now that we’ve achieved our goal of being one of the foremost ETF providers, we’re focused on marketing our expertise,” says Baudson.
She says the firm is concentrating on certain specific characteristics – the low cost of its product, the quality and the innovation Amundi ETF offers its clients.
So although Amundi ETF will not be launching as many products as it did in the past two years, Baudson says: “We plan to grow significantly, both in terms of product lines and also to sell our funds in more countries.”
One of the most recent expansion announcements was the launch of 23 new funds on the Six Swiss Exchange. This helped Amundi ETF increase its presence in the Swiss market and boosted the number of products it has on that particular exchange to 43.
Amundi ETF has more than 200 products cross-listed on NYSE Euronext (95), Deutsche Börse (63), Borsa Italiana (60) and SIX Swiss Exchange (43).
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