Credit Suisse Asset Management Revives ETFs After BlackRock Sale

(Bloomberg) -- Credit Suisse Asset Management is getting back in the exchange-traded fund game nearly a decade after it effectively exited the business by selling its European unit to BlackRock Inc.

The Swiss firm plans to convert three of its index funds into ETFs that will trade on Deutsche Boerse AG, Borsa Italiana and SIX Swiss Exchange AG, 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 132 billion Swiss francs ($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 Group AG has gathered more than 65 billion euros ($71.2 billion) into its products as demand surges among technology-savvy investors like robo advisers.

“In order to serve those clients, we want to be able to offer ETFs, bringing our indexing capabilities to a format that’s traded on an exchange,” Valerio Schmitz-Esser, head of Credit Suisse Asset Management index solutions, said in an interview.

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.

Fee compression is also ramping up, with the likes of Vanguard Group 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

To contact the reporter on this story: Ksenia Galouchko in London at kgalouchko1@bloomberg.net

To contact the editors responsible for this story: Blaise Robinson at brobinson58@bloomberg.net, Yakob Peterseil, Sid Verma

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