HSBC Enters European ETF Market

Listed on the London Stock Exchange, the new ETF (ticker: HUKX) is designed to track the performance of the FTSE 100 index, according to an announcement.

The HSBC FTSE 100 ETF, domiciled in Ireland, is registered for sale in the UK, and a number of additional registrations are planned across Europe. HSBC Global Asset Management will be the investment manager and HSBC Global Markets will ensure liquidity as a market maker. The total expense ratio will be 0.35%, according to the firm.

In making the announcement, HSBC noted that, as of May 2009, ETFs represent around 2% of the European mutual fund market compared to 6% in the US, according to European data from  EFAMA and BGI and US data from the Investment Company Institute (ICI). HSBC said it envisage “substantial growth” as ETFs “become an important part of the investment toolkit.”

HSBC’s entry into the European ETF market complements its business in Asia, through Hang Seng Bank, majority owned by HSBC, and HSBC Global Asset Management in Hong Kong.  Together they have almost 8% of the regional ETF assets under management, according to the firm.  Earlier this month Hang Seng Bank’s ETFs became the first Hong Kong-listed funds to also be listed in Taiwan.

Beyond Europe, HSBC plans to leverage its global capabilities to extend its ETF business across Asia, Latin America, and the Middle East.

“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.”