ANNOUNCEMENT: Expert Investor is now PA Europe. Read more.

First ETF launches in Europe via white-label platform

EMQQ Emerging Markets and Ecommerce ETF is first index tracker launched in Europe on third-party platform


David Robinson

ETF platform HANetf will launch the EMQQ Emerging Market Internet and Ecommerce Ucits ETF on the London Stock Exchange on Friday.

HANetf said it was the first Ucits ETF in Europe to launch via “an independent white-label ETF platform” which expands access to the industry.

A white-label platform allows a third party to create a product to sell it as its own.

The company said it follows the path of the US ETF industry where asset managers using a white label platform to launch ETFs has become commonplace, the company said.

The fund seeks to provide exposure to an index of leading companies driving the growth of online consumption in the developing world.

To be included, companies must derive more than half their profits from E-commerce or internet activities, including search engines, online retailers, social networks, online video, online gaming, e-payment systems and online travel.  Companies included do not need to be listed locally.

“Asset managers who aspire to join the European ETF market have a cost effective, scalable and coherent market entry solution,” HANetf said in a statement.

Hector McNeil, co-Founder and co-CEO at HANetf, said: “The first launch is a watershed moment for every asset manager wanting to evolve their European ETF strategy. [It] has removed the high barriers to creating and launching ETFs in Europe, opening the gates for more asset managers – traditional, systematic or active – to benefit from the powerful distribution potential of ETFs.

“US managers in particular see Europe as a much more complex set of markets. They are used to a market structure that has one or two exchanges, single settlement & clearing, one currency, one language and one tax system. Europe has multiple exchanges, clearing, settlement, taxes, languages, currencies and other complexities like Brexit and Mifid II. HANetf navigates all these complexities for the asset manager.”

The EMQQ Emerging Markets and Ecommerce UCITS ETF tracks an index of leading internet and Ecommerce providers serving the emerging markets. The index contains over 50 constituents, including Alibaba, Tencent and Baidu, weighted according to a modified market-capitalization methodology with individual constituents capped at 8%.

The ETF mirrors the US-listed version of the product that has garnered more than $365 million in assets. The fund lists on London Stock Exchange (Ticker EMQQ ) with a TER of 86 bps. The opening share price is $8.88. Big Tree Capital and EMQQ Index are first clients to launch via the HANetf white-label platform.