CLSA Hong Kong Holdings (CLSA) has acquired 49% of an exchange traded funds (ETF) business owned by Hong Kong-based Enhanced Investment Products (EIP).

 

CLSA’s investment into EIP’s “XIE Shares” ETF platform will enable EIP broader distribution to CLSA’s global client base of institutional investors, access to China through CLSA’s parent company CITIC Securities and the potential for new products backed by CLSA’s research.

 

Asia’s ETF market currently represents US$198 billion AUM and as it continues to grow, the acquisition of EIP’s “XIE Shares” ETF platform provides a new product stream for those investors seeking high-touch alternatives.

 

Jonathan Slone, CLSA chairman and CEO said: “CLSA looks forward to allowing clients access to our intellectual capital and strong research track record through new ETF products. With EIP’s track record as one of Asia’s leading ETF issuers, we have a strong and reliable partner.”

 

CLSA and EIP will consider new products under the XIE Shares brand. Over time, these may include thematic and sector-driven ETF’s whose underlying stocks are supported by CLSA benchmark research. “Commercialization of CLSA’s research through exchange listed funds is a natural extension of our current offering to institutional investors,” Slone said.

 

Tobias Bland, CEO at EIP, says: “EIP will be one of the most significant ETF providers in Asia. CLSA is the perfect partner to achieve this goal. Its exceptional distribution network, particularly in China with CITIC Securities, along with CLSA’s award winning research capabilities, will allow us to offer our investors varied products and efficient vehicles to express their investment views.”

 

XIE Shares offers seven exchange traded funds tracking the local indices of seven emerging Asia countries: India, Indonesia, Korea, Malaysia, the Philippines, Taiwan and Thailand.

 

Beyond China, APAC regional ETF growth is estimated at 15%-20% annually. As of August 2014 year-to date Asia Pacific domiciled ETPs took in net new assets of US$29 billion with Japan, Hong Kong and China leading the region in AUM market share at 46.6%, 20.2% and 13.7% respectively.

 

CLSA’s Xen Gladstone, global head of sales and Nigel Beattie, managing director, new business and product development will join the EIP board of directors.