HSBC to provide custody and fund administration for new sustainable ETFs

New products launched by HSBC’s asset management arm add to growing list of sustainable ETFs which continue to amass inflows.

By Jonathan Watkins

HSBC’s securities services business will provide custody and fund administration for two new sustainable ETFs launched by the bank’s asset management arm. 

HSBC’s Global Asset Management launched the Emerging Market Sustainable Equity UCITS ETFand the Asia Pacific ex Japan Sustainable Equity UCITS ETF. 

The ETFs will be benchmarked against the FTSE Russell ESG Low Carbon Select indices, targeting a 20% ESG improvement and a 50% reduction on carbon and fossil fuels reserves intensity.  

The ETFs are in addition to four sustainable ETFs HSBC launched earlier this year. 

Sustainable or environmental, social and governance (ESG) linked ETFs passed the $100 billion milestone according tETFGI, with a significant uptick in July. The products gathered net inflows of $6.76 billion during July, bringing year-to-date net inflows to a record $38.78 billion. 

“The launch of these new generation of sustainable ETFs demonstrates how HSBC is combining its depth of expertise and range of capabilities across its markets and securities services franchise to  support clients with new products that meet investors’ ESG criteria for companies contributing to a low carbon future,” said Paul Heffernan, head of business development and client management, asset managers, at HSBC. 

It’s been a busy month for HSBC’s ETF servicing team with two mandate wins at the end of July. The first came through BlackRock, where the HSBC was appointed the global custodian and trustee for the first domiciled master-feeder exchange traded fund (ETF) structure in Hong Kong.  

Just a few days after, the bank was named by Tabula Investment Management to provide securities services to three of its new sub-funds on their Irish-domiciled Tabula ICAV UCITS platform. The mandate includes a bundled package across fund administration, depositary and custody on HSBC’s growing European ETF servicing platform.