BNP Paribas prepares first Irish ETF launches

BNP Paribas Asset Management is preparing to launch its first Ireland-domiciled exchange traded funds, shortly after domestic rival Amundi started offering Dublin-registered ETFs.

The asset management arm of French lender BNP Paribas said the fund house was currently awaiting approval from the Irish regulator, the Central Bank of Ireland, for its first locally domiciled ETFs.

BNP Paribas AM said it hoped to receive approval from the Irish watchdog “fairly soon”.

The €488bn ($527bn) asset manager has until now concentrated on developing its range of Luxembourg and France-domiciled ETFs.

BNP Paribas AM said its ETF expansion plans included markets such as the UK, Switzerland and the Nordic countries, “where investors have a preference” for Ireland-domiciled funds.

This article was previously published by Ignites Europe, a title owned by the FT Group.

Another reason for the Irish ETF push cited by the company is that the Dublin domicile allows investors to pick products that can benefit from Ireland’s favourable tax arrangements.

BNP Paribas AM pointed to specific fiscal advantages of Ireland-domiciled funds, notably that dividends on US equity ETFs carry a 15 per cent withholding tax, compared with 30 per cent for products registered in Luxembourg and elsewhere in Europe.

Ignites Europe reported in October last year that Amundi, Europe’s largest listed asset manager, had launched a 10-strong range of Irish ETFs in a sign of the house’s ambitions to expand its business and compete with BlackRock’s iShares, the market leader.

Detlef Glow, head of Europe, Middle East and Africa research at Refinitiv Lipper, said at the time that Ireland’s tax treatment of ETFs “makes the management more efficient and helps the fund manager to achieve the performance goals of the ETF”.

Nizam Hamid, an independent ETF consultant, said “this makes a difference to the total return of the ETF and also makes sense in the context of wanting to have a competitive product given that other large issuers such as iShares” have Ireland-domiciled ETFs.

Amundi rolled out its first Ireland-domiciled ETF in May last year.

*Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. It covers everything from new product launches to regulations and industry trends. Trials and subscriptions are available at igniteseurope.com.