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Credit Suisse Asset Management returns to ETFs in ‘hokey-cokey’ move

Credit Suisse Asset Management is re-entering the ETF business seven years after selling its range to Blackrock.

The asset manager is converting a trio of index funds into ETFs to become: the CSIF (IE) MSCI USA Blue, CSIF (IE) MSCI USA ESG Leaders Blue and CSIF (IE) MSCI World ESG Leaders Blue Ucits ETFs. The Swiss bank’s asset management arm has 90 index funds in its range.

Collectively, the ETFs represent approximately CHF700m (€656m) worth of assets.

Credit Suisse sold its ETF business to Blackrock in 2013, when assets under management were CHF16bn. A press release at the time described the sale as “an important strategic step in an industry that requires significant scale”.

“They are doing the hokey-cokey on ETFs,” said 7IM senior portfolio manager Peter Sleep. “First they are in, then they are out and then they are back in again.”

Credit Suisse’s legacy in ETFs is still evident in the tickers now used by Blackrock, such as the CSPX for the iShares S&P 500 Core ETF or the CSPXJ for the iShares Core MSCI Pacific ex Japan ETF.

It followed in the footsteps of a number of other investment banks that sold out of the ETF business, including Barclays, which sold iShares to Blackrock in 2009.

Fintechs target of CSAM move into ETFs

Credit Suisse AM suggested fintechs would be its target client for its fledgling ETF business.

Head of Emea Michel Degen said the business was making a targeted entry into the ETF business. “The strategic importance of ETFs will further increase in the future as digital sales platforms gain greater significance.”

Altus director for wealth Simon Bussy said Credit Suisse AM would be facing much stiffer competition as it reenters the ETF business after seven years.

Bussy said: “Credit Suisse AM must ensure they identify and focus on the future winners. This is not easy in the very busy and much-hyped fintech space, and it’s worth noting that BMO Global AM recently closed its European ETF business.”

Credit Suisse AM said in a press release the ETFs would be rolled out in areas where they exhibit efficiency advantages over index funds.

Valerio Schmitz-Esser (pictured), head of Credit Suisse Asset Management Index solutions, added: “We have been replicating indices with exacting precision for a wide array of asset classes, regions and currencies since 1994, and have been doing the same for ESG sustainability indices for over two years now.

“Through our core business, index funds, we have the critical mass and possess the technology and expertise to provide ETFs in targeted investment segments that supplement our existing offerings.”

The ETFs will initially be offered on the SIX Swiss Exchange, the Borsa Italiana and the Deutsche Börse.

Jessica Tasman-Jones

Jessica Tasman-Jones is news editor at Portfolio Adviser and covers fund selection, asset allocation and portfolio construction for intermediaries, as well as industry news and regulation. Previously she...

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