Industry Updates

HSBC GAM slashes fees amid ETF push

George Geddes

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HSBC Global Asset Management (HSBC GAM) has reduced the total expense ratio (TER) for three equity ETFs following growth in assets and client demand.

The three ETFs offer exposure to emerging markets, Pacific ex-Japan and Europe. The fees have been reduced by at least a half, underpricing several competitors.

ETFsPrevious TERNew TERHSBC MSCI Emerging Markets UCITS ETF (HMEM)40bps15bpsHSBC MSCI Pacific ex Japan UCITS ETF (HMXD)40bps15bpsHSBC MSCI Europe UCITS ETF (HMEU)20bps10bps

The reduction follows HSBC GAM’s announcement of its plans to launch eight environmental, social and governance (ESG) ETFs and expanding its team by 15 employees in H1 2020.

At 40bps, HMEM was one of the mid-priced MSCI emerging markets ETFs available but its fee cut underprices Amundi and Invesco at 20bps and 29bps, respectively.

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Similarly, HMEU’s fee reduction to 10bps has underpriced iShares, Xtrackers, Amundi and Invesco’s similar products.

HSBC GAM has a suite of 29 funds and manages $8.5bn globally in ETF strategies.

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