HSBC launches its first European exchange traded fund tomorrow, which will be Dublin-domiciled and listed on the London Stock Exchange, with the ticker HUKX.
It will be HSBC’s first ETF outside of Asia, and it will offer investors a total expense ratio of 0.35%.
HSBC said the fund would be the “first in a planned suite of ETFs” for the European market, and that it planned eventually to leverage its global reach to extend its ETF business across Asia, Latin America and the Middle East.
HSBC’s share of the total Asian regional ETF market – through Hang Seng Bank, which is majority owned by HSBC, and HSBC Global Asset Management in Hong Kong – is currently approaching 8% of assets under management, according to the London-based banking group.
The HSBC FTSE 100 ETF is registered for sale in the UK, with additional registrations planned across Europe.
HSBC Global Asset Management will be the investment manager, and HSBC Global Markets will ensure liquidity as a market maker.
HSBC, Europe’s largest banking group, is already an established provider of custodial, market-making and other services to the global ETF industry.
‘Substantial growth in sector’
HSBC said it envisages “substantial growth” in the ETF sector as investors increasingly turn to ETFs in search of simpler, relatively lower-risk and low-priced alternatives to actively-managed investment funds.
ETFs currently represent around 2% of the European mutual fund market, compared with 6% in the US, according to figures from EFAMA, Barclays Global Investors and Investment Company Institute.
Said Samir Assaf, head of global markets at HSBC: "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.”
On 14 August, Hang Seng Bank’s ETFs became the first Hong Kong-listed funds to also be listed in Taiwan.
