A $19 Billion Player Enters Battle for Thematic Funds in Europe

One of the major players in the U.S. market for thematic exchange-traded funds is firing the first shots in its bid to conquer Europe.

New York-based Global X is launching two new products in the region on Friday, its first foray into the $1.3 trillion European industry -- the world’s second-largest after the U.S.

The firm is betting that Europe will ultimately prove just as hospitable to thematic funds, which track categories like pet care, sports or remote working rather than traditional benchmarks. Assets in American ETFs following themes have swelled to $111 billion this year as retail investors flock to the easy-to-understand products.

A $19 Billion Player Enters Battle for Thematic Funds in Europe

“Many of the trends that we’ve seen in the U.S. ETF market in the last five years, we expect to see in Europe over the next five,” Luis Berruga, Global X’s chief executive officer, said in a phone interview. “There’s definitely an appetite for thematic investing ideas.”

The Global X Video Games & Esports ETF (HERU) and the Global X Telemedicine & Digital Health fund (EDOC) will list on the London Stock Exchange charging 50 basis points and 68 basis points a year, respectively.

Global X, which was acquired by Mirae Asset in 2018, boasts more than $19 billion in assets across over 70 funds. It was a pioneer of thematic ETFs, and its largest product is the $2.3 billion Global X Robotics & Artificial Intelligence ETF (BOTZ).

The firm hired two executives for its new London office earlier this year and plans to make three more additions in sales and capital markets in the next month, according to Berruga. The company wants to roll out between five and 10 ETFs over the next year and list products on the Deutsche Boerse Xetra exchange, he said.

©2020 Bloomberg L.P.

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