Industry Updates

HSBC AM to delist Far East ETF as enthusiasm for geographic products wanes

HMFE becomes HSBC AM's second geography-specific closure in three months

Jamie Gordon

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HSBC Asset Management will shut its Far East ETF as the firm's geography-specific products struggle to find support among European investors.

The HSBC MSCI EM Far East UCITS ETF (HMFE) will close on 6 July after delisting from stock exchanges the day before.

The firm said primary market creations and redemptions in HMFE will be possible through 4 July while the ETF’s last day of secondary market trading will be 30 June.

HSBC AM directors have the discretion to redeem all shares and terminate a fund if its net asset value falls below $50m. At the time of writing, HMFE has assets under management (AUM) of $23m, according to data from ETFLogic.

Speaking to ETF Stream, a spokesperson for the firm said: "We have decided to close HMFE 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 EM country strategies, which are a cornerstone of our global ETF offering."

Investors will receive their money within 10 business days of the ETF’s redemption, HSBC AM said. The legal and administrative costs involved in the product’s closure will be borne by the firm but investors will absorb the transaction costs associated with liquidating assets.

HMFE becomes only the latest casualty of low investor demand for HSBC AM’s geographic ETF range. In March, the firm delisted the HSBC MSCI South Africa Capped UCITS ETF (HZAR) after it fell “below its economically viable size” with AUM of $5.3m.

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