HSBC is launching its second ETF, with a fund tracking the European market’s most popular index.

The HSBC Dow Jones Euro Stoxx 50 ETF is to be listed on the London Stock Exchange tomorrow, 6 October. The fund is domiciled in Ireland and is a subfund of HSBC’s umbrella ETF structure, HSBC ETFs plc.

The new ETF will carry a total expense ratio of 0.15% per annum and will index its investments by physical replication (i.e. by owning the underlying index stocks).

The DJ Euro Stoxx 50 index was launched in February 1998 and represents 50 supersector leaders in the 12 eurozone countries (Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain). The index is weighted by float-adjusted market capitalisation, with a 10% cap on any component's weight in the index.

HSBC is entering one of the most crowded segments of the ETF market: European issuers already offer 10 ETFs tracking the DJ Euro Stoxx 50 index, with total expense ratios ranging from zero to 0.45% per annum. The largest existing funds of this type are run by Lyxor (€5.1 billion in assets under management), iShares Germany (€4.4 billion), iShares Dublin (€3.8 billion) and db x-trackers (€1.9 billion).

When it launched its first fund in July, HSBC said that it plans to add an ETF tracking the French CAC 40 index by the end of October, with funds tracking fixed income and commodity indices to follow.