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Interview with Daniele Tohmé-Adet – SIGMA BNPPAM …
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Dear Daniele Tohmé-Adet, EasyETF is reknowed for being innovative as an ETF provider. However, your developpement has been different from the competition. Could you tell us more about your evolution and your offering ?
We have worked a lot a on innovation since the passive management team is part of a department called Structured Indexed and Generation Multi-Alpha whithin BNP PAM. Moreover our Financial ingineering department is very helpful to remain in advance on competition.
We were the first worldwide to create a commodity ETF, a Sharia compliant ETF, a Low Carbon ETF, credit ETF, Middle East ETF…We have now completed the range with some core indices and have continued to develop our replication expertise (pure, synthetic, sampling).
It is sometime difficult to find out the right products since the offering is so broad on Euronext. This is the reason why competitors have tried to differenciate their offering. What set EasyETF appart?
Our main distinction is the quality of our management : the fund management team is expert in replication and delivers exellent TE performances campared to competition.
We are being awarded many times by Lipper and Morningstar.
We are MIFID compliant when competitors working within an investment bank are not.
We use to select swap counterparties in open architecture with a very strict control from the risk department.
Transparency is very important to us
Some of our ETFs are available in Euro and USD on Euronext. Why have you listed both of these currencies ? What is your strategy ? How strategic is the French Market for you ? Could you elabore on this ?
We definitely target the institutional market : many of our European investors do manage themselve their currency overlay and prefer investing in a non-converted share class. Our Asian and Middle East based investos prefer USD share classes because Euro investments generate a new currency risk.
ETFs did well during trouble times on markets. What about your ETFs ? Have you suffered from outflows or benefited from large inflows ?
Indeed, ETFs have been much more appreciated and a lot of intitunional investors have learnt more and more about it. ETFs have been prefered to traditional mutual funds because there is at least one market maker providing a price in real time. Now, the passive management globally benefits from this trend.
We have heard a lot on replication methodologies. On the one hand there are people prefering the pure replication and on the other hand thoses who prefer the synthetic methodology. What is your position on that ?
We choose the most suitable replication methodology with regards to the underlying index and its ability to be replicated. We also use quantitative tools to confirm which methodology is the least expensive. With regards to synthetic replication, we are MIFID compliant which garanty the best execution. We only deal swaps with bank counterparties authorized by our risk management. When we are asked for a pure replication of an emerging index, we explain to the investors that it should deliver a much higer tracking error and then he changes his mind.
EasyETF offers both replication methods in its range.
Since equity markets are very volatile, what kind of strategies should be of interest ?
Investors should select a fund allocator able to manage their exposure to risky assets with regards to market conditions. Within SIGMA, we manage funds of ETF and offer tactical allocation mandates.
Do you have new products in your pipeline ?
We have been working on new asset classes in order to develop our existing offering but we may also decide to reshuffle some our ETFs to stick to institutional needs.