Emerging market product to be first launched on ETF platform

Emerging market product to be first launched on ETF platform

The latest venture from the former chief executive of WisdomTree will help launch its first product next month.

HANetf, which is founded and run by Hector McNeil, claims to be Europe's first independent white label ETF platform and on Friday 5 October the first product to launch through the service will come to market.

The EMQQ Emerging Markets and Ecommerce UCITS ETF will be launched with Big Tree Capital and EEQ on the HANetf platform.

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

Mr McNeil, who left WisdomTree when the ETF specialist bought out the remaining stake in its European entity, said: "With this launch, HANetf has single-handedly 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.

"EMQQ is an ideal strategy for our first launch, being highly innovative and unique to the European market. US and Asian managers who haven’t entered the European ETF market are a major target for HANetf."

To be included in the ETF, companies must derive more than half their profits from online, including search engines, online retailers, social networks, online video, online gaming, e-payment systems and online travel.

The companies in question do not need to be listed on an emerging market index and instead it tracks an index of leading internet and ecommerce providers serving the emerging markets.

The index has more than 50 constituents, including Alibaba, Tencent and Baidu, weighted according to a modified market-capitalization methodology with individual constituents capped at 8 per cent.

The ETF will be listed on the London Stock Exchange and has an annual charge of 0.86 per cent.

Ben Yearsley, director at Shore Financial Planning said: "I’d rather have an active fund in this space such as Fidelity China Consumer fund as an example as it is easy to destroy value. This kind of ETF is very specialised - will advisers really consider adding something this specific to client portfolios?"

WisdomTree Europe was formed when the US firm bought a 75 per cent stake in London firm Boost in 2014. Boost was founded by Mr McNeil and Nik Bienkowski in 2011.