GLOBAL - HSBC has unveiled its first European ETF, the HSBC FTSE100, which is listed on the London Stock Exchange.
The fund, which traditionally replicates the performance of the FTSE100 index, is domiciled in Ireland and is for sale in the UK, although numerous other registrations are planned across Europe. The bank also plans to extend its ETF business across Asia, Latin America and the Middle East.
HSBC Global Asset Management global head of wholesale distribution Farley Thomas said: "We will probably launch three or four ETFs this year - the next two we're almost certain of launching in October will be DJ Eurostoxx 50 ETF and a CAC 40 ETF."
He explained that the bank wants to embrace all replication approaches and will look at full replication, partial replication and swap-based models for future funds.
He said: "I would expect that we end next year with at least 20 ETFs - these would then cover most of the big equity allocations and will focus on the mainstream country indices."
While there are already many ETFs tracking the FTSE100 index in existence, Thomas said the bank is not looking to differentiate itself through the choice of index or the investment approach.
He said: "If you're looking for a good, very high quality household name that you can trust, with a high quality product that is slightly cheaper than the market leading equivalent, then HSBC would be a good bet. We're not trying to be the cheapest in the market, but firms like HSBC are missing from the ETF competitive landscape."
He explained there has been a lot of demand for HSBC ETFs from the bank's own internal teams, in both the private bank and the asset management division, as frequent users of ETFs.
He added: "Since we're committed to asset management, we have to be committed to ETFs as a source of growth."
HSBC Global Asset Management will be the fund's investment manager, while HSBC Global Markets will provide liquidity as a market maker. The fund will have a total expense ratio of 0.35%.
HSBC head of Global Markets Samir Assaf said: "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."
The bank is also present in the Asian ETF market through Hang Seng Bank, which is majority owned by HSBC and HSBC Global Asset Management in Hong Kong, and jointly have around 8% of the regional ETF assets under management.
Hang Seng's ETF range also became the first Hong Kong-listed funds to be cross listed in Taiwan in mid-August.
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