LISTED PRODUCT NEWS
HSBC WELCOMES NEW BRAZIL ETF
The global investment bank has decided to increase its suite of ETFs and now offers one that tracks the Brazilian stock index. This is the first BRIC ETF launched by HSBC. However, it plans to increase its range further to include the other emerging powerhouses in coming months. The fund has a total expense ratio of 0.6 per cent and will track the MSCI Brazil index, which includes some of Brazil’s largest companies, such as mining behemouth Vale. The new ETF will be listed on the London Stock Exchange and will be domiciled in Ireland.
ETP TRADERS’ FLIGHT TO SAFETY
Deutsche Bank has released its quarterly update on the ETP market. It says that fears about the sovereign debt crisis in Europe and a slowdown in the recovery in the US have weighed on the ETP market, which recorded negative growth of -0.85 per cent year to date. However, flows have increased since the start of the second quarter and in both Europe and the US inflows have totalled $44.1bn, which is significantly above the $18bn for the first three months of the year. But investors are being much more cautious, with equity flows continuing to decline.
TAX RULES CLARIFIED FOR ETFS
ETF Securities confirmed the tax status of its funds yesterday after reports that holders of ETFs without “reporting” or “distributor” tax status would be liable to pay income tax at 50 per cent. But ETF Securities’ has confimed that its products do not fall in the bracket, since it has achieved “distributor” tax status for all of its products listed prior to June 2010. This means that holders of ETF Securities’ products will only be liable for capital gains tax at either 18 or 28 per cent. For products listed after June 2010 reporting fund status has, or will be, submitted.