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First Trust Global Portfolios Ltd launches multi-factor Eurozone ETF on Euronext… HSBC to provide asset services to Korea’s first RQFII manager…

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Gottex Fund Management is gearing up to launch its first UCITS product under the popular RQFII program that gives global asset managers access to China’s equity markets. The fund is scheduled to launch in the first quarter of 2015 according to the firm’s latest trading statement. It will invest in China’s A-shares market and will be managed by the Gottex-VStone Asset Management office in Shanghai. Gottex moved to establish a joint venture with VStone last year.

The firm currently has USD8.71bn of client assets as at 30 September. On the same day it completed its merger with the EIM Group after receiving approval by FINMA, the Swiss regulatory authority.
Gottex saw good performance for the nine months to the end of September across funds and geographies: market neutral solutions posted positive returns net of fees ranging from 3.1 per cent to 5.1 per cent; Asian products continued their strong summer performance generating positive returns of between 2.5 per cent and 6.5 per cent; daily liquidity and regulated UK and European multi-asset endowment style retail products added over three per cent of performance.
In other RQFII news, HSBC is to provide asset services to Shinhan BNP Paribas Asset Management, the first Korean institutional investor to be awarded an RQFII license. In its capacity, HSBC will act as trustee and custodian for the firm’s RFQII funds. Martin Tricaud, president and CEO of HSBC in Korea said that the landmark deal would help develop Korea as an offshore RMB centre “by opening up a new channel of RMB flows back into China under the RQFII pilot scheme”.
“We are delighted to become the first custodian bank servicing RQFII Korean investors,” Tricaud was quoted as saying. “HSBC offers clients our strengths and experience as the leading custodian bank servicing foreign institutional investors in China and our global network, including strong collaboration between our China and Korea teams. We will continue to support the Korean government initiative to promote RMB internationalisation in Korea and to ensure that our clients here benefit from the globalisation of China's currency.”

New York-based WisdomTree, one of the ETF industry’s leading sponsors, and a pioneer of dividend-weighted ETFs, this week announced the launch of its European UCITS ETF platform. In response to investor demand for ‘smart beta’ products, WisdomTree has listed its first four ETFs on the London Stock Exchange, giving investors access to large- and small-cap US and European equities. The four products to launch on the platform are:

  • WisdomTree Europe Equity Income UCITS ETF (EEI)
  • WisdomTree Europe SmallCap Dividend UCITS ETF (DFE)
  • WisdomTree US Equity Income UCITS ETF (DHS)
  • WisdomTree US SmallCap Dividend UCITS ETF (DESE)

The establishment of WisdomTree’s European business marks a number of firsts for the European ETF industry.  WisdomTree becomes Europe’s first ETF provider focussed on dividend-weighted ETFs and Europe’s first issuer of dividend-weighted small-cap ETFs.
The ETFs are Irish-domiciled and physically replicated, with the underlying shares being held with State Street. One of the world’s leading ETF market makers, KCG Europe, will act as market maker for the products.
Jonathan Steinberg, CEO and President of WisdomTree Investments, Inc. said: “WisdomTree is a proven ETF innovator and a passionate ETF industry advocate.  We are excited to bring our unique ETF focus and experience to this important market, where we seek to offer differentiated investment solutions backed by a veteran management team.”      
Nik Bienkowski, Co-CEO of WisdomTree Europe added: “We are extremely proud to be launching WisdomTree’s first UCITS ETFs in Europe.  WisdomTree is founded on well-built indices, insightful research and a track record of innovation.  In addition to BOOST ETPs, which provide investors with a unique product set to hedge portfolios or enhance returns, WisdomTree ETFs are unique, tracking broad indices, with most backed by live track records of more than eight years.”
Euronext this week welcomed First Trust Global Portfolios Ltd., with the firm launching what I believed to be the first multi-factor Eurozone ETF in Europe.
The First Trust Eurozone AlphaDEX UCITS ETF allows investors to participate in the Nasdaq AlphaDEX Eurozone Index and aims to mirror its returns by investing in stocks of companies as per their weightings in the index.
Benjamin Fussien, Head of ETFs & Investment Funds at Euronext, said:We are glad to welcome First Trust Global Portfolios, Ltd. as a new issuer to our markets today. This ETF offers the fast growing number of ETF users in Europe unique exposure to stocks from the Eurozone in a flexible, transparent and cost-efficient investment way. Being part of this innovative product launch is a demonstration of our central role in facilitating product innovation.”
Derek Fulton, CEO, First Trust Global Portfolios, said that the product offering marks another important step in First Trust’s expansion in the UK and Europe: “This expansion will continue, with other launches planned as we increase the UCITS range to provide access to the breadth and depth of our unique AlphaDEX® ETFs.”
Euronext’s is one of the leading platforms in Europe for ETF listing and trading, counting close to 700 listings of almost 600 ETFs on its four markets by the end of June 2014. In the same period, the average ETF assets under management (AUM) at Euronext totalled EUR187.2bn, a year-on-year increase of 19.8 per cent.  

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