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HSBC Asset Management’s ETF and Indexing business passes USD100bn in AUM

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HSBC Asset Management’s (HSBC AM) ETF and Indexing business has passed USD100 billion in assets under management (AUM), reflecting its rapid expansion over the past four years.

The firm writes that it currently manages USD101 billion in assets across its range of ETFs and Index funds, up 181 per cent from USD36 billion at the end of 2019, when the business repositioned its passive growth strategy with the arrival of CEO Nicolas Moreau.

The firm writes that therapid growth, which has outpaced that of the wider European ETF and Index fund market, has been facilitated by the development of the firm’s passive product suite and the launch of new product ranges focused on minimising tracking error and costs for investors, with a track record of consistent performance.

The success of the platform has also been driven by the business’ focus on client service excellence, alongside the expansion of the ETF and Indexing team in areas including sales, investments, product, and operations.

Growth in ETF assets

HSBC AM’s ETF assets have increased fourfold from USD8.8 billion at the end of 2019 to over USD37 billion as at end of March 2024, with the firm writing that this has represented a faster rate of growth compared to the European ETF market, which has doubled in size over the same period. The firm now also has one of the best performing and third largest MSCI World ETFs in the market at USD9.6 billion, which demonstrates the ability of the platform to manage funds at scale.

This strong growth has been reflected in prominent industry rankings, with the UCITS ETF business climbing from 12th largest by AUM at the end of 2019 to 8th, according to ETFBook.

Growth in Index funds

The firm writes that assets in HSBC AM’s Index funds have more than doubled from USD27 billion at the end of 2019 to over USD63 billion as at end of March 2024, compared to the wider European Index fund market which has expanded by a third over the same period according to data from Morningstar.

The firm now has the largest Global Aggregate Bond Fund in the market at USD11.7 billion, while its Global Islamic Equity Strategy has increased fivefold since the end of 2019, reaching USD5.5 billion in AUM as at end of March 2024. HSBC AM now has a range of nine Islamic funds in different passive wrappers, providing clients with multiple investment options.

HSBC AM’s UK-domiciled Index fund assets have more than doubled in size to reach over USD43 billion in AUM since the end of 2019, with its American Index Fund reaching over USD17.8 billion AUM.

Nicolas Moreau, Chief Executive Officer, HSBC Asset Management, says: “This significant achievement demonstrates our sustained efforts to transform our business over the past four years and reflects the strategic importance of our passive platform within our wider strategy.

“As the popularity of passive investments among retail and institutional clients continues to grow, we expect the size of the ETF and Index fund market to further accelerate over the coming years.

“We remain committed to strengthening our offering to provide our clients with innovative and reliable strategies that consistently deliver index performance to help them meet their investment needs in the years ahead.”

Olga De Tapia, Global Head of ETF & Indexing Sales at HSBC Asset Management, says:

“This key milestone speaks to the quality of our client service and the strength of our product range, which has become synonymous with expertise in emerging markets and sustainable investing. We have seen our core products continue to gather assets at an accelerating pace, coupled with strong interest across our sustainable and faith-based product ranges.

“Going forward, we will retain our focus on putting our clients first and acting as a reliable partner for them. We will also continue to expand our offering to provide clients with leading products across the core, emerging market, sustainable, faith-based, and thematic investing spaces, helping them construct portfolios with a range of risk profiles, suitable for a variety of market environments.”

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