Amundi steps up efforts to compete with BlackRock’s ETF empire

Amundi has launched a 10-strong range of exchange traded funds in Ireland in a sign of the company’s ambitions to grow its business and compete with market leader iShares.

The French asset manager has previously focused on building its Luxembourg product range, including moving over €30bn of its ETF assets from France to the Grand Duchy in 2018.

Amundi became Europe’s second-largest ETF provider following the completion of its acquisition of Lyxor earlier this year, having indicated that it wanted to close the gap with iShares.

Its ETFs have assets of €162.6bn and a 13.5 per cent European market share, data from Refinitiv Lipper show. BlackRock’s ETF arm has €550.6bn in European assets and a market share of 45.8 per cent.

The creation of a range of global equity products that integrate environmental, social and governance considerations show Amundi’s ambitions to accelerate its growth.

The products track S&P indices covering a range of market sectors, including communication services, consumer discretionary, consumer staples, financials, healthcare, industrials, information technology, materials and utilities.

This article was previously published by Ignites Europe, a title owned by the FT Group.

The range also includes the Amundi S&P Global Energy Carbon Reduced Ucits ETF, which tracks S&P’s Developed Ex-Korea Large Mid Cap Energy Index, but additionally selects and weights stocks to “collectively enhance sustainability and ESG profiles, meet environmental targets and reduce the carbon footprint at the index level”.

The ETFs each have annual charges of 18 basis points and are classified as article eight under the EU’s Sustainable Finance Disclosure Regulation, which are products that promote sustainable or environmental characteristics.

Amundi began to offer Irish ETFs when it launched three products domiciled in the market earlier this year, one each in May, June and July.

But the new launches push this development further and give the firm’s clients the option of products that can benefit from favourable tax arrangements in Ireland.

Detlef Glow, head of Europe, Middle East and Africa research at Refinitiv Lipper, said the products’ high US exposure meant they would be able to take advantage of a 50 per cent reduction in withholding tax paid on dividends for ETFs in Ireland.

“This tax treatment makes the management more efficient and helps the fund manager to achieve the performance goals of the ETF,” Glow said.

Nizam Hamid, an independent ETF consultant, agreed, saying it was a “pragmatic move” by Amundi.

“This makes a difference to the total return of the ETF and also makes sense in the context of wanting to have a competitive product given that other large issuers, such as iShares, have Irish-domiciled ETFs,” he said.

*Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. It covers everything from new product launches to regulations and industry trends. Trials and subscriptions are available at igniteseurope.com.

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