Industry Updates

HSBC AM slashes fee on real estate ETF

TER cut from 0.40% to 0.24%

Theo Andrew

a construction site with cranes

HSBC Asset Management has slashed the fees on its real estate investment ETF from 0.40% to 0.24% in a bid to make the product more competitive.

The HSBC FTSE EPRA NAREIT Developed UCITS ETF (HPRD) saw its total expense ratio (TER) cut in March, recording outflows of $22.3m in the six months following, according to data from ETF Logic.

HPRD currently has $197.6m assets under management.

The ETF which tracks the FTSE EPRA NAREIT Developed index which offers exposure to listed real estate and Real Estate Investment Trusts worldwide.

Real estate can be seen as an effective inflation hedge, with dividends increasing at double the rate of inflation over the past 25 years and performing positively in six of the last eight rate hiking cycles.

Despite this, HPRD has returned -14.4% so far this year despite rallying by 7.9% over the past month.

Launched in 2011, the ETF has returned 3.3% over a five-year period.

Olga de Tapia, global head of ETF and indexing sales at HSBC AM, said: “The fee was reduced in March this year to make the product more competitive and to enable clients to benefit from the economies of scale that we have.

“The ETF provides investors with the diversification that real estate offers. With inflation forecasts still at the forefront of investors’ minds, the real estate sector offers partial inflation hedging properties.”

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