HSBC GAM announces ETF push in 2020

Jan 2nd, 2020 | By | Category: ETF and Index News

HSBC Global Asset Management has announced plans to expand its ETF business in 2020.

HSBC GAM announces “ETF push” in 2020

HSBC Global Asset Management is planning to launch its first ESG ETFs in the first half of 2020.

The firm, which currently manages around $50 billion in passive strategies, including c. $8.5bn in ETFs, has publicly outlined its intentions to launch several new products and significantly increase its team of in-house ETF professionals.

The move aims to breathe new life into HSBC’s asset management business which has underperformed its rivals in recent years.

HSBC GAM’s current ETF roster consists predominantly of passive equity funds offering ‘plain-vanilla’ market-cap-weighted strategies.

This includes ETFs tracking classic, well-known stock market indices, such as the S&P 500 and FTSE 100, as well as broad-market regional and single-country benchmarks. Its largest ETF is the $3.78bn HSBC S&P 500 UCITS ETF (HSPX LN).

In a bid to diversify its product offering, the asset manager is planning to build out a range of ETFs that invest according to environmental, social, and governance (ESG) criteria.

The funds will seek to tap into the growing demand for sustainable investing – according to data from ETF industry research firm ETFGI, assets invested in ESG ETFs globally grew by 136% between 1 January and 30 November 2019 to reach $52.3bn.

Competition amongst providers of ESG ETFs is also increasing. There are already 118 ESG ETFs in Europe, housing $28.2bn in assets under management.

HSBC GAM plans to roll out eight ESG ETFs in the first half of the year, focusing on global developed, US, European, UK, Europe ex-UK, Japanese, Asian, and emerging markets equities.

Nicolas Moreau, Global CEO of HSBC GAM, commented, “ETFs are still one of the fastest-growing investment products in Europe and Asia, and we are seeing increased demand from our clients for ESG-focused ETFs. Combining our responsible investment and ETF expertise is a natural next step for us. These launches will also provide our distribution partners with the right products to cater to the demand they see from their clients.”

The firm also noted its intention to develop its first fixed income ETFs as well as introduce a passive platform for precious metals later in the year.

To support these initiatives, HSBC GAM is planning to create around 15 roles across different functions including product development, operations, sales specialists, capital markets, marketing, and ETF strategists.

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