Amundi has been one of the fastest-growing European ETF providers over the last year, nearly trebling its assets under management. Valerie Baudson, Managing Director of Amundi ETF, spoke recently to Paul Amery, editor of IndexUniverse.eu, about her firm’s expansion plans.

IU.eu: Valerie, what’s been behind the rise in assets under management over the last year?

Baudson: First, we have a competitively priced range of products. Second, we’ve performed well in terms of tracking error against our fund benchmarks. Third, the rapid expansion of our product range has helped bring in some new investors. In 2009, we focused on listing ETFs in only France to start with, but this year we’ve been listing and promoting the funds very actively in other European markets – in Germany, Switzerland, Italy and the Netherlands.

We’re now the fourth ETF provider in Europe in terms of number of funds.

IU.eu: The UK is absent from your listing strategy – will you be bringing your funds to Britain as well?

Baudson: We’re still considering this.

IU.eu: You’ve made a point of setting your funds’ total expense ratios at a level below that of the competition. At the same time the European ETF market is becoming more competitive, with several new entrants over the last two years. Is the ETF market able to sustain all these firms, or do you expect some to start to leave the business?

Baudson: Contrary to what a lot of people say, the European ETF market is still very concentrated in the hands of a few providers, so I don’t feel that there’s already too much competition. In fact, I’d expect more issuers to join the market. This should help lower costs overall and improve product quality, which should be good for clients at the end of the day.

As far as the number of listings is concerned, it’s correct that there is a large number already, but not if you compare ETFs with the huge number of actively managed open-ended funds in Europe.

For me, there’s still room for plenty more competition, in other words, and I see this as one of the opportunities in the ETF industry, not as a threat.

IU.eu: You recently launched a range of short (inverse) bond ETFs with different maturity bands – what was the thinking behind this?

Baudson: We launched our first short European government bond ETF in January this year and we’ve now added some additional European funds to allow investors to focus on particular maturities along the yield curve. The funds offer short exposure to five maturity segments: 1-3, 3-5, 5-7, 7-10 and 10-15 years, based on the EuroMTS indices. The demand for these is coming from clients who would like to express a short view but who can’t do so using futures, for example. These are the first funds of their type in Europe.

More recently, in June, we launched some long and short US Treasury bond ETFs of the same type, based on the Markit iBoxx indices.

We have both long and short (inverse) ETFs in each case, so we’re not taking a market view of any type. In any case, it takes several months to prepare and launch a new ETF, so it would be difficult to try and time a launch to meet particular investor demand. We want to bring products to investors that are useful as asset allocation tools.

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