HSBC Asset Management has launched the first UK-domiciled index fund to track the S&P 500 Equal Weight Thermal Coal Screened Index, capitalising on investors’ desire to diversify their exposure to US equities.
It will be available for wholesale and institutional investors, offering equally weighted exposure to the index, barring exclusions in line with the firm’s coal policy.
The launch reflects growing enthusiasm for equally weighted exchange-traded fund (ETF), which enjoyed $2bn inflows in September.
Bhavick Patel, head of UK ETF & Indexing Sales at HSBC, said: “Index concentration in US large-cap equity benchmarks is top of mind for investors. The S&P 500 Equal Weight Equity Index Fund offers timely, diversified access to US equities at a moment when investors are looking for alternatives to market cap weighted benchmarks to mitigate this risk.”
Last year wealth managers said they were shifting away from market-cap weighted trackers due to the high concentration of the S&P 500 in particular the ‘Magnificent Seven’, which have dominated the market for much of the past three years, leading to a dislocation between the largest US stocks and the remainder of the large-cap index.
Today’s announcement also comes after Invesco launched Europe’s first ETF tracking the MSCI World Equal Weight Index last month.