HSBC will launch tomorrow the bank’s first European exchange traded fund as part of an expansion of its global ETF businesses.
Designed to track the performance of the FTSE 100 index, the HSBC FTSE 100 ETF will be listed on the London Stock Exchange, domiciled in Ireland, and registered for sale in the UK. A number of additional registrations are planned across Europe. HSBC Global Asset Management will be the investment manager and HSBC Global Markets act as market maker. The total expense ratio will be 0.35%.
ETFs represent around 2% of the European mutual fund market, compared with 6% in the US.
“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.
“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 already has almost 8% of the Asian ETF assets under management. In August, HSBC-majority owned Hang Seng Bank’s ETFs became the first Hong Kong-listed funds to also be listed in Taiwan. In addition, HSBC plans to leverage its global capabilities to extend its ETF business across Asia, Latin America and the Middle East.