Industry Updates

HSBC AM shuts South Africa ETF as assets decline

HZAR is no longer “economically viable”

Theo Andrew

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HSBC Asset Management (HSBC AM) has delisted its South Africa ETF after its assets under management (AUM) fell “below its economically viable size”.

The HSBC MSCI South Africa Capped UCITS ETF (HZAR) has an AUM of $5.3m, well below the $50m threshold that gives the company directors the discretion to terminate an ETF.

HSBC said it also considered the “reduced level of investor demand” for HZAR and the unlikely scenario of assets increasing in its decision to delist the ETF.

A HSBC spokesperson said: “We have decided to close the HZAR as it has now fallen below its economically viable size.

“Client demand for this fund does not justify the expense of the underlying market in the context of the overall size of the fund, however, we remain committed to growing our ETF range and offering investors quick market access to single emerging market country strategies, which are a cornerstone of our global ETF offering.”

The firm added its range remains under constant review to ensure it has the best offering to meet the current and future needs of its clients.

“We remain fully committed to the growth of our ETF range, especially our existing specialised exposures,” it said.

Another of its emerging market strategies, the HSBC MSCI Russia Capped UCITS ETF (HRUB) suspended primary market trading on 2 March following the closure of the Moscow Stock Exchange and remains in limbo after European exchanges halted trading on all Russian ETFs.

The asset manager has continued to expand its product offering in recent months, launching a suite of ESG fixed income ETFs as well as several climate transition ETFs.

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