HSBC is giving shape to its ambitious plans of entering into the $183 billion European ETF market, by launching a fund that tracks London’s FTSE 100 index – reported Financial Times.
The UK-listed bank, which intends to roll out about 50 ETFs over the next three years, is not the only bank to foray the lucrative European ETF market. Several banks and asset managers are turning towards passive investment vehicles, as active fund managers are getting backlash for charging high fees and poor performance.
Credit Suisse, Source, an ETF platform set up by Bank of America Merrill Lynch, Morgan Stanley, and Goldman Sachs and a host of other banks are also trying to grab market share. It has been reported that HSBC will target both institutional as well as retail investors and expand in Asia, besides Latin America and the Middle East.
Farley Thomas, global head of wholesale distribution at HSBC Global Asset Management, said: We believe our future is linked to indexation and ETFs and not just active management. The big firms with resources and trusted brands are going to be the winners in this game. ETFs currently represent 2% of the European mutual fund market compared to 6% in the US. The party has not begun yet, reported the Daily Mail.
