HSBC launches BRIC 40 ETF

HSBC has launched an exchange traded fund that gives European investors access to the BRIC emerging market economies.

The new HSBC S&P BRIC 40 ETF opened on the London Stock Exchange Wednesday 26 January, with a Total Expense Ratio of 0.60%.

Domiciled in Ireland and Ucits III compliant, the fund is managed by HSBC Global Asset Management (UK) Limited and administered by HSBC Securities Services (Ireland) Limited.

Currently listed in sterling and USD, the global bank hopes to register the new ETF on other European exchanges, including cross-listings.

All index constituents trade on stock exchanges in Hong Kong, the UK and the USA.

The new fund aims to mirror the performance of the S&P BRIC 40 Index.
As with all HSBC ETFs to date, the HSBC S&P BRIC 40 ETF will use ‘physical replication’ tracking its index.

It aims to invest in securities in generally the same proportions as in the index but may not take exposure to all securities within the index.

The ETF will appeal to investors hoping to tap into the BRIC countries, Brazil, Russia, India and China, famously identified by Goldman Sachs’ head of asset management Jim O’Neill in 2001, who argued they would outperform developed economies by 2050.

HSBC has held BRIC funds since 2004, but it is the first time the bank has married up that investment strategy with an ETF approach.

According to the bank’s current estimates, it has almost $30bn of AUM in the BRIC markets, with $7.5bn in ETF AUM globally.

HSBC first entered the European ETF market in August 2009 with a FTSE 100 listing.

Further information on the new fund is available on the bank’s ETF website, www.etfs.hsbc.com.

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