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Credit Suisse is back in ETFs after fueling BlackRock’s rise

Credit Suisse by Bloomberg
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Credit Suisse Asset Management is getting back in the ETF game nearly a decade after it effectively exited the business by selling its European unit to BlackRock.

The Swiss firm plans to convert three of its index funds into ETFs that will trade on Deutsche Boerse, Borsa Italiana and SIX Swiss Exchange, it said in a statement on Monday. The asset manager will introduce products “where they exhibit efficiency advantages over index funds,” according to the release.

It’s a comeback of sorts for the money manager, which oversees $135 billion in index products across the region. Credit Suisse sold its European business to BlackRock in 2013, helping catapult the New York-based firm into the regional leader with 44% market share. Since then, rival UBS has gathered more than $71.2 billion into its products as demand surges among technology-savvy investors like robo advisors.

“The strategic importance of ETFs will further increase in the future as digital sales platforms gain greater significance,” Michel Degen, head of Credit Suisse Asset Management Switzerland and EMEA, said in the release.

Although still a fraction of the $4.6 trillion U.S. market, the European ETF scene is becoming increasingly cut-throat, with Goldman Sachs Asset Management starting its business in the region last year. Others, such as BMO Global Asset Management, have succumbed to competitive pressures.

More than half of them track the industry’s top-performing category.
December 18

Fee compression is also ramping up, with the likes of Vanguard recently slashing costs on its passive products in the region.

The move by Credit Suisse “sounds like they are doing it for a robo adviser or someone else who wants intraday liquidity,” said Athanasios Psarofagis, an analyst at Bloomberg Intelligence.

CS AM is introducing the following funds:

  • CSIF (IE) MSCI USA Blue UCITS ETF
  • CSIF (IE) MSCI USA ESG Leaders Blue UCITS ETF
  • CSIF (IE) MSCI World ESG Leaders Blue UCITS ETF
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