Citi has closed its Velocity white-label ETF platform less than a year after launching the challenger to specialist providers HANetf and Waystone.
A spokesperson for the bank told ETF Stream, which first reported the news: “Citi’s markets business made a strategic decision to retire its Citi Velocity ETFs platform in Europe following a review of market conditions.
“Regardless of this outcome, we want to be unequivocally clear about Citi’s focus on the large and growing ETF industry, both globally and in Europe. Client demand for Citi’s comprehensive suite of solutions across our markets and investor services businesses continues to intensify and we remain well-positioned to deliver our capabilities as an end-to-end ETF service provider,” Citi said.
Citi’s retreat follows Goldman Sachs’ wind-down of its Accelerator platform last year.
Our view
David Batchelor, senior analyst at QuotedData, said: “Citi abandoning their Velocity ETF platform mere months after launch is striking and leaves some egg on the face of the American giant. It hints at the complexities involved in providing an end-to-end ETF service, and the dominant market position of HANetf, Europe’s largest white-label provider. Indeed, it would appear that one of the two prospective clients Citi was in discussions with, DZ Bank, will instead now pass their ETF venture to HANetf. And Citi itself has a minority stake in HANetf, acquired around the same time as they launched Velocity ETFs. It looks like any more meaningful challenge to HANetf’s position will instead come from lower cost ‘ETF-as-a-service’ offerings, of the type State Street offered Columbia Threadneedle for its entry into the European active ETF market.”
