HSBC has announced that it is to break into the European exchange traded funds (ETF) market with the launch of a suite of ETFs, beginning with the HSBC FTSE 100 ETF.

The new ETF, listed on the London Stock Exchange, will track the performance of the FTSE 100 index, domiciled in Ireland, and is registered for sale in the UK and a number of additional registrations planned across Europe.

HSBC Global Asset Management will be the investment manager for the ETF, and HSBC Global Markets will ensure liquidity as a market maker; the total expense ration will be 0.35 per cent.
Following positive results and uptake of ETFs over the past few years, pushed by investors' demand for simpler, more flexible, risk controlled and good value investment products, HSBC sees substantial growth in the future as they become an important part of the investment toolkit for all types of investor. Currently, ETFs represent around two per cent of the European mutual fund market, and six per cent in the US.

"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," commented Mark McCombe, chief executive officer of HSCB 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," added Samir Assaf, head of global markets at HSBC. "By leveraging the capabilities of the HSBC Group in fund management, market making, custody and fund administration, we are confident we can progressively build a strong suite of ETFs."

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

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