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Supplements » ETFs Report 2011


Denis_PanelTHEAM, the newly launched specialist asset manager within BNP Paribas Investment Partners, has recently reshaped its EasyETF offer and is now focusing its energies on a range of 'star' ETFs to ensure it provides clients with the best products available on the market.

For some ETF providers, launching numerous products is the answer to making it in the business. But for THEAM, the key to success lies in a focused range of high quality products through which the firm can provide strong performance and come out on top.

Denis Panel, THEAM CIO, says: “We want to be the best in class in all the different segments of activity. We reduced the EasyETF product range in order to concentrate our offer around the main asset classes and provide a flagship for each of them. Our star ETFs are: EasyETF Euro Stoxx 50, EasyETF S&P GSCI Capped Commodity 35/20, EasyETF EPRA Eurozone, EasyETF iBoxx Liquid Sovereigns Global; they offer investors exposure to European equities, commodities, real estate and government bonds, respectively.

Being focused does not mean that our offer is limited to a few flagships. Indeed, in order to meet investors’ expectations, we are always happy to consider alternative solutions such as index funds, mandates and other bespoke investment solutions that we will build together with our clients.

“There are many things to say about ETF ranges that are very large with bad performance and a small amount of assets under management. This is definitely something we want to avoid because we believe that the first thing that investors are looking for is performance, quality of set up, quality of the management, quality of the spreads.”

“When we look at the highly competitive ETF market these days, we are always surprised to see that some ETF providers are keen to launch very exotic products and continue to grow their range while assets under management are systematically concentrated on a very limited number of blockbusters. We, at THEAM, prefer to think in terms of usefulness for our clients and try to favor quality rather than quantity. We intend to develop selectively our ETF offer”.

Panel says the performance of the EasyETF range has been very robust and this is one of the firm’s differentiating factors. “We have one of the best ETFs in terms of performance. For example, in 2009, the Eurostoxx 50 ETF outperformed the index by 88 basis points. This shows it’s a very competitive product, even when compared to active management.” In 2010, this same ETF outperformed by 39 basis points.

Panel mentions that one thing THEAM is “working very hard” on is to improve spreads available on its products. He adds: “We now have a multi-market maker model and these different market makers will help us reduce the spreads of the ETF even more”. We  also need to keep in mind that liquidity of the underlying is key when you think about an ETF liquidity.

With so many ETF providers coming to market, THEAM, like its competitors had to concentrate on those criteria that make it stand out from the crowd. THEAM intends to differentiate itself in different ways. THEAM’s approach consists in providing index management solutions in different formats (mutual funds, ETFs, mandates) in order to fit to clients’ specific needs. THEAM is also likely to offer services in terms of choice of appropriate indices.  THEAM intends to offer customised solutions going well beyond its ETF toolbox offer for efficient asset allocation. As an example, THEAM provides many index portfolios created to answer specific needs : non-cap weighted indices, Sharia compliant indices, socially responsible indices.

Regarding replication methods, THEAM is not sticked to one single method and intends to select index replication methods (ie : full, optimised, synthetic) that are best suited to index specificities and cost constraints. Overall, THEAM’s objective is to enable its clients to benefit from tailor-made solutions and its capacity to deliver innovative products thanks to the seamless integration of its asset management teams and teams specialised in derivatives use.

Regulatory speaking, Panel says the Ucits framework is beneficial to the clients as it offers investors a certain element of comfort and security. “We plan to continue to promote ETF’s in Ucits III format because there is strong demand and because we have excellent performance and a good offer in this space.”

©2011 funds europe