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Deutsche Bank- Synthetic Equity & Index Strategy-Global-ETF Handbook Series-Accessing Asia through ETFs
May 21, 2013--A global guide for accessing Asian markets with ETFs
Asia-growth drivers of the world economy
Asia has assumed increasing importance in the world stage with its high GDP growth rates and stable economic outlook. In contrast to major western countries which have been impacted by the credit and financial crisis, Asian economies have maintained a relatively stable growth path in the past decade.
IMF data indicates that close to 35% of the world GDP is contributed by Asia, which has been consistently increasing in the past few years. The aggregate weight of Asian components in the MSCI ACWI has increased steadily from 13% in Dec 2001 to 20.6% in Apr 2013.
Growth rates for major Asian countries peaked in 2011 before trending lower in 2012. As per Deutsche Bank estimates, Emerging Asia could record a GDP growth rate of 6.8% in 2013. The GDP growth estimates for Asia top the US and Euro Area and bear a positive outlook for 2013-14.
Equity market performance – Broad Asian indices outperform major global benchmarks
Broad Asian equity indices like the MSCI AP ex JPY and MSCI EM Asia recorded growth of 21-22% in 2012 and outperformed major global benchmarks like the MSCI World and S&P500 which went up by 16% over the same period. As per Deutsche Bank analysts, this trend is expected to continue in 2013 with year end targets for Asian indices placed much higher than the major benchmarks; S&P 500: 1,625 (3% upside), STOXX 600: 315 (7% upside), MSCI China: 75 (28% upside), Sensex: 22,500 (17% upside)
Access to Asia through ETFs
ETFs offer an easy access to Asian markets which can otherwise be complex due to fragmented markets, each with their own set of regulations for investing. They can also serve as an important investment vehicle in countries with restrictive foreign access such as China and India.
Currently there are over 1201 listings (665 products) of Asia focused ETFs in 24 countries across the globe with combined assets of over $232.6bn. These ETFs have recorded YTD Cash inflows of $15.5bn.
Asia focused ETFs have witnessed a remarkable annualized growth of over 15% since 2006 which indicates a healthy rise in their adoption as an investment vehicle across the globe. In addition to strong growth in AUM, there has been a massive expansion in the number of products as well; from 97 in 2006 to 665 presently. This has been possible on account of a large number of ETF issuers coming to the market with product offerings focused on Asia. Vanilla ETFs dominate the product list but there is healthy presence of more sophisticated products as well, offering a choice of investment.
This report looks at the range of ETFs which offer access to Asia and highlights considerations for ETF investors seeking exposure to the Asian markets. We also provide a product directory of globally listed ETFs which have an Asia focus.
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Source:Deutsche Bank -Synthetic Equity & Index Strategy-Global
DB-Synthetic Equity & Index Strategy-Asia-Pac Weekly ETF Market Review-ETP AUM added $1.9bn, Cash flows moderate
ETP Weekly Cash Flows
Turnover Review
Assets under Management Review
request report Tokyo Commodity Exchange Monthly Foreign Customer Trades Hit All-time High In April view more
Yuanta JV plans Greater China ETF platform view more BPI pegs planned ETF to MSCI index “We are entering into a subscription agreement with them to be our index provider,” she added.
view more TSE : Indicative NAV Published For New ETFs And ETNs Through The FLEX Standard Service view more More Vanguard ETFs in the pipeline
The ETF, Vanguard’s first retail offering in Hong Kong, offers investors exposure to large-and mid-capitalisation stocks in 11 Asian countries. It has a 22% weighting on China, 19% on South Korea and 15% on Hong Kong.
view more China president takes charge of sweeping economic reforms view more Vanguard Selects FTSE for First Hong Kong Domiciled ETF
FTSE continues to build on its position as a leading global benchmark provider through index innovations and by customizing indices to meet the specific needs of investors and offering them increased investment opportunities.
view more Japan's Q1 growth beats forecasts view more If you are looking for a particuliar article and can not find it, please feel free to contact us for assistace.
May 21, 2013--Market Review
Last week, all the major markets in the Asia-Pacific region had mixed markets. Compared to the week before, from north to south:
Japan (Nikkei 225) +3.63%
Korea (KOSPI2) +2.48%
China (CSI 300) +2.02%
Hong Kong (HSI) -1.02%
Singapore (FSSTI) +0.16%
Australia (S&P/ASX 200) -0.49%
New Product Launch Review
The Asia-Pacific ETP flows during last week totaled +$333mn (+0.2% of AUM) vs. +$3.9bn (+2.7% of AUM) of inflows the previous week, setting the YTD weekly flows average at +$303mn (+$6.1bn YTD in total cash flows). Equity ETFs recorded inflow of +$287mn of inflows while fixed income ETFs registered inflows of +$46mn. Emerging Country equity ETFs witnessed the highest weekly cash flows of +$174mn among all the segments. ETPs offering exposure to China registered inflows of +$136mn while Japan witnessed outflows of -$83mn.
Asia-Pacific ETP turnover totaled $12.2bn for the last week, -1.2% down from the previous week’s total. Japan reached on the top of the turnover ranking with $4.1bn turnover, followed by China ($3bn), South Korea ($2.8bn) and Hong Kong ($1.6bn). Among equity ETFs, emerging country, leveraged long, Asia-Pacific developed country and short ETFs had total turnovers of $4.5bn, $2.7bn, $2.3bn and $0.6bn, respectively. Among the commodity asset class, turnover in gold ETPs totaled $345mn.
Last week, Asia-Pacific ETP AUM added $1.9bn, and ended at $153.8bn. On a year-to-date basis, Asia-Pacific ETP market is up by $17.9bn or 13.1% above last year’s closing.
Source:Deutsche Bank - Synthetic Equity & Index Strategy - Asia
May 21, 2013--The Tokyo Commodity Exchange, Inc announced today that the April 2013 monthly volume of customer trades (sell & buy) originating overseas marked all-time high with 2,244,433 contracts renewing the record made in February 2013
with 1,920,053 contracts. This volume accounts for 34.3% of total monthly trades recording the highest ratio.
Source: TOCOM
May 21, 2013--After launching a fixed income mutual fund in China, Taiwan's Yuanta will roll out a more unusual cross-border ETF, a big step forward for China, Hong Kong and Taiwan.
Taiwan's largest mutual fund house, Yuanta Securities Investment Trust, has partnered China Resources to set up a joint venture in Shenzhen and will launch a fixed income fund later this year.
Source: Asian Investor
May 19, 2013--AYALA-LED Bank of the Philippine Islands' (BPI) planned exchange traded fund (ETF) product will track the performance of the MSCI Philippines index, a senior bank official said.
“Our ETF product will replicate the performance of the MSCI Philippines index,” said Theresa Marcial-Javier, BPI senior vice-president and group head of BPI Asset Management and Trust Group, told reporters in Makati City on Thursday last week.
Source: Business World Online
May 17, 2013--Beginning June 17, 2013, Tokyo Stock Exchange, Inc. (TSE) will publish the real-time Indicative Net Asset Value (Indicative NAV) per share
through the FLEX standard service for the below Exchange Traded Funds (ETFs)and Exchange Traded Notes(ETNs)
Source: Tokyo Stock Exchange (TSE)
May 17, 2013--Vanguard Group has launched its first Hong Kong-domiciled exchange traded fund, with plans to introduce more ETFs to the region in the future.
The Vanguard FTSE Asia ex Japan Index ETF is its first locally-domiciled product offering, says Shelly Painter, a regional MD, adding that Vanguard chose to domicile the fund in Hong Kong because it is an easier process than exporting a UCITS fund.
Source: IP&E
May 17, 2013--Chinese President Xi Jinping has taken charge of drawing up ambitious reform plans to revitalize the economy, sources close to the government said, shunning policy stimulus for fear it could worsen local government debt and inflate property prices.
A consensus had been reached among top leaders that reforms would be the only way to put the world's second-largest economy on a more sustainable footing, said the sources, who are familiar with the plans and Xi's involvement. China's economic growth is at its weakest in 13 years, although still the...
Source: Todays Zaman
Customised FTSE index for Vanguard HK debut
Global relationship extends to Hong Kong
May 16, 2013--FTSE Group ("FTSE") has been selected by Vanguard, one of the top three US asset management firms, as the index benchmark provider for its first Hong Kong domiciled ETF, which listed on Hong Kong Exchanges and Clearing Limited ("HKEx") on 15 May.
The ETF is based on an index which FTSE has customised for Vanguard - FTSE Asia Pacific ex Japan, Australia and New Zealand Net Total Return Index.
Source: FTSE
May 16, 2013--Japan's economy grew faster than expected in January-March, expanding at its quickest pace in a year on the back of solid private consumption and a rise in exports spurred by Prime Minister Shinzo Abe's aggressive monetary and fiscal stimulus.
Thursday's Cabinet office data showed, however, that corporate investment has yet to follow to ensure a sustained economic upturn. Gross domestic product (GDP) rose 0.9 percent from the previous quarter, against the median forecast of 0.7 percent expansion in a Reuters poll of analysts. The growth translated
Source: Todays Zaman
