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Would you heed financial advice from former-U.S. President George W. Bush? Hong Kong’s Enhanced Investment Products at a press reception Wednesday recruited ‘Bush’ to launch its first program of synthetic swap-based equity derivative exchange-traded funds on the Hong Kong Stock Exchange. ETF investment is a “no brainer,” according to the somewhat polarizing figure. EIP is obviously banking on Bush being able to win over the ETF skeptics and differentiate the firm’s XIE Shares program from competitors.
But wait, look closely at the pictures. No red-blooded Texan male would ever wear that much makeup. Or chin putty. The ex-president was actually Steve Bridges, an Indian Wells, Calif.-based impersonator employed by EIP for a tongue-in-cheek marketing push. While the launch was all in good fun, it shows how cutthroat the ETF business is getting in Hong Kong, according to market pundits.
Tobias Bland, ceo at EIP in Hong Kong, said as the new player in the ETF market, it is important to get the brand’s name out there. The use of the ‘president’ was designed to convey the simplicity of EIP’s funds. “People think of the president as very straight forward, perhaps not the brightest person in the room,” Bland said. EIPs funds should also be seen as very straight forward. “And even George Bush gets it,” Bland added.
EIP’s launch followed closely behind Deutsche Bank’s listing of its new range of synthetic ETFs in January (DI, 1/11). Deutsche Bank was the first to break the synthetic ETF drought in 2012 with its range of equity derivative funds referencing South East Asia indices. Ping An of China Asset Management is also readying three China-benchmarked ETFs (DI, 2/6). The spate of issuance comes as a relief to investors as the market was effectively closed for about a year, as issuers grappled with new collateralization regulations from the Securities and Futures Commission.
Marco Montanari, director, head of db X-trackers ETFs and db-funds, Asia global markets at Deutsche Bank, said branding is important with over 100 ETFs listed in Hong Kong and another 15 funds launched already this year. “We always highlight our brand. But innovation is still the best way to grab an investor’s attention,” he said. “We had the first ETF linked to Malaysia, Thailand, Indonesia and we choose MSCI indices,” he noted. “Coming to the market, it’s important to differentiate yourself from already listed products.”
So, would Deutsche Bank ever get a Bill Clinton impersonator? “We haven’t thought about that actually,” Montanari said. “This is a decision for the corporate communications team.”
Bland said the advertising agency that devised the marketing is also gearing for a concentrated viral campaign over the coming weeks. He said it was important for the firm to differentiate its products from competitors, such as Deutsche Bank. “There’s always the negative connotation that you’ve got two similar products,” he said. Deutsche Bank’s new ETFs are benchmarked against MSCI indices, while EIP uses local share markets to reference its funds, an important distinction that may be glossed over by some investors, Bland noted.
But, why Bush? Surely there are other “simple” characters out there? “Sarah Palin got a look in, but she’s just not as famous as George Bush unfortunately,” Bland noted.
