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Asset Management - July 07, 2009

ETFs have really come into their own. An interview with Fathi Jerfel.

In this month's interview, Fathi Jerfel, Chief Executive Officer, Crédit Agricole Structured Asset Management and Crédit Agricole Structured Asset Management Americas, discusses the the research chair on "Core-Satellite and ETF Investment" at the EDHEC Risk and Asset Management Research Centre and ongoing developments in the ETF market.

Fathi Jerfel

You recently set up a research chair with the EDHEC Risk and Asset Management Research Centre on "Core-Satellite and ETF Investment". Could you tell us what your aspirations are for this research chair?

Fathi Jerfel: The Research Chair is an excellent way to gather market intelligence on the investment habits of institutional investors in this rapidly growing sector over a prolonged period. CASAM has clearly set out its ambitious development plan in this market over the next three years and this Research Chair will accompany this expansion to ensure that we are completely in line with investors’ needs.

Have you seen increased interest in recent years on the part of your institutional clients in the core-satellite approach to investment management?

Fathi Jerfel: Yes, indeed, interest in the core-satellite approach has increased and this is no exception within the ETF sector. Core-satellite portfolio management with ETFs translates into various and easy-to-access exposures to meet particular risk objectives, using ETFs either in the core or in satellites.

The EDHEC European ETF Survey 2009, which was released at the end of May, has received considerable coverage in the international press. As the sponsor of this survey, what do you think are the most important conclusions?

Fathi Jerfel: The first point is that the findings are very positive – the level of investor satisfaction of ETFs is extremely high.

The findings also reveal that investors tend to buy and hold ETFs rather than switching in and out indicating that they see them as a long term strategic allocation investment tool. This very much confirms the feedback that we regularly receive from investors.

The third point I would highlight is that ETFs have really come into their own in the sense that they tend to be the preferred investment tool among other indexing instruments such as futures, traditional index funds and total return swaps. This confirms that ETFs represent a real investment tool box offering investors a wide selection of underlyings and asset classes to suit their needs in various market conditions.

ETFs have been one of the very few success stories during the financial crisis. Has this been a growth period for CASAM and do you expect the expansion to continue over the next few years?

Fathi Jerfel: CASAM has launched around 50 products over the last twelve months, which is in line with the development plan that we established at that time. The market has continued its strong growth over this period and CASAM ETF has seen its assets grow by more than EUR 1billion since September 2008. We have set ourselves a very tight schedule for developing the product range precisely for this reason and we have started to see the marketing and sales efforts accompanying this development bring satisfactory results.

You have made a major commitment to supporting the EDHEC Risk and Asset Management Research Centre's research by partnering on the new research chair. Could you tell us why you chose to work with the EDHEC Risk and Asset Management Research Centre?

Fathi Jerfel: When CASAM set out to develop the CASAM ETF range, we decided to focus on high quality products at low cost. Our partnership with the EDHEC Risk and Asset Management Research Centre simply reflects this strategy to offer high quality and to bring our clients real added value, from an economic point of view and in terms of investment strategy.

About Fathi Jerfel

Starting his career at Crédit Lyonnais, Fathi Jerfel held positions of Market Operator (1986-1989), Bond Manager (1990-1992) and of Head of Financial Engineering (1992-1996). He joined Crédit Agricole Asset Management in 1996 as Head of Structured Management and Research. In 2002, he was given responsibility for Convertible Bond Management. In 2003, he became a member of the Executive Committee of CAAM. Fathi Jerfel is a graduate engineer from Polytechnique (1981) and from l’Institut Français du Pétrole (1986). In addition, he holds a DEA in Economics and in Petroleum Management (Dijon, 1986). In September 2005, Fathi Jerfel was appointed Chief Executive Officer of Crédit Agricole Structured Asset Management (CASAM). Since January 2008, Fathi Jerfel, is a member of the General Management Board, in charge of specialised management.