Published by Asset Management – 3rd Aug 2018
France’s Amundi Asset Management (Amundi) is looking to expand its exchange-traded fund (ETF) business in Asia by providing more customised passive solutions to local institutional investors, according to the company’s North Asia ETF head.
Amundi made inroads into the region in October 2016 with the launch of two ETFs in Hong Kong, the Amundi FTSE China A50 Index ETF and the Amundi Hang Seng HK 35 Index ETF, which currently have approximately HK$490 million (US$62.8 million) and HK$171 million, respectively, of assets under management (AUM).
According to Sunny Leung, Amundi’s head of ETF, indexing & smart beta sales for North Asia, the company is placing emphasis on institutional business in the region amid growing demand for passive strategies.
“Besides the two ETFs that are available to all investors, we offer institutional clients a broad range of more than 100 Undertakings for Collective Investment in Transferable Securities [UCITS] ETFs covering all assets classes including smart beta and environmental, social and governance [ESG],” Mr. Leung says in an interview with Asia Asset Management.
He says the company leverages its customisation and research capabilities to provide investors with tailor-made index and smart beta solutions, and is developing the ETF range through “continuous dialogue” with clients in Asia.
“In equity, we’ve seen investors exploring more on thematic ideas and related trades rather than directional trades. We’ve also seen investors are looking for market neutral strategies in the (current) bumpy environment,” he says. “In fixed income space, we’ve seen more demand into floating rate notes due to rising interest rate concern.”
Asian investors are also using smart beta strategies for risk management. For instance, some use active or passive factor investing solutions to gain explicit exposure to underlying risk factors, while others adopt variance strategies to avoid unrewarded risk, he adds.
Overall, according to Mr. Leung, Asian institutional investors are increasingly selecting ETF-based solutions as a complement to diversify their portfolio allocations because these products are innovative and cost effective.
Paris-based Amundi had more than 40.3 billion euros (US$46.6 billion) of ETF AUM globally as at June 30, 2018, up from 32.9 billion euros a year ago.
