Industry Updates

HSBC AM shuts Malaysia equity ETF due to low demand

Follows the closure of its South Africa ETF in March

Theo Andrew

HSBC Asset Management

HSBC Asset Management is set to close its Malaysia equity ETF due to low assets under management (AUM).

The HSBC MSCI Malaysia UCITS ETF (HMYD) has $4.8m AUM, well below the $50m threshold that gives company directors the discretion to terminate an ETF.

HSBC cited the “reduced level of investor demand” for HMYD and the unlikely scenario that assets would increase in the future for the decision to close the ETF, which launched in March 2011.

In a shareholder note, HSBC AM said: “The fund is below that threshold and, therefore, the directors have determined to compulsorily redeem the shares and close the fund with effect from the closure date. 

“In making this decision, the directors also considered the reduced level of investor demand for the fund and considered it unlikely that the net assets of the fund would increase sufficiently in the future to justify the continuation of the fund.”

It added the closure would take place on 7 December and will delist from the London Stock Exchange on 12 December.

The ETF is also listed on the SIX Swiss Exchange, Deutsche Boerse and Borsa Italiana.

“On the closure date, all shares will be compulsorily redeemed in accordance with the terms of the prospectus and redemption proceeds, calculated as of the closure date, will be remitted to shareholders within 10 business days,” it added.

It follows the closure of the HSBC MSCI South Africa Capped UCITS ETF (HZAR) which had $5.3m in AUM in March.

The asset manager has continued to grow its product range over the past 12 months, launching four value and small-cap ESG ETFs targeting world and emerging market equities.

In September, HSBC AM outlined plans to phase out thermal coal investments by 2040 and engage with its passive and active holdings to support the transition away from coal-fired power and coal mining.

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