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Asia ETF Roundup (Industry) – October 2018

HK/UK sign mutual recognition of funds; RQFII ETFs see estimated net inflows of Rmb 1.5 billion.

Jackie Choy 08/11/18

For economic and market news relating to Asian ETFs, please refer to our “Asia ETF Roundup (Market) –October 2018”.

ETF Industry News

Hong Kong and United Kingdom Sign Mutual Recognition of Funds

Hong Kong’s Securities and Futures Commission (SFC) and the UK’s Financial Conduct Authority (FCA) entered into a Memorandum of Understanding on Mutual Recognition of Funds on 8 October. This will enable eligible funds in both jurisdictions to be distributed in each other’s market through a streamlined authorization process. Passively managed index-tracking ETFs are also included in the types of eligible funds under the MoU. The MoU can be found here.

Shanghai and Japan Exchanges Sign MOU on Feasibility of ETF Connectivity

On 26 October, the Shanghai Stock Exchange and Tokyo Exchange Group signed a Memorandum of Understanding to strengthen cooperation between the two exchanges. According to the JPX website, the two main areas of cooperation will include: (1) conducting feasibility studies about developing a new environment for expanding opportunities to invest in each other's securities markets through the use of ETFs; and (2) investor-oriented promotional activities regarding Japanese and Chinese securities markets.

RQFII ETF Watch – Net Inflows Totaled Rmb 1.5 Billion in October

  • RQFII ETFs recorded estimated net inflows of Rmb 1.5 billion in October (5.7% of beginning AUM), which compares with net inflows of Rmb 0.8 billion in September. This puts YTD estimated net outflows from RQFII ETFs in Hong Kong at Rmb 2.4 billion.
  • Net inflows came mainly from the CSOP FTSE China A50 ETF (82822 & 02822), estimated at Rmb 1.1 billion and the ChinaAMC CSI 300 Index ETF (83188 & 03188), estimated at Rmb 0.5 billion.
  • The largest A-Share ETF by AUM in Hong Kong, iShares FTSE A50 China Index ETF (02823/82823), recorded an estimated net inflow of Rmb 1.0 billion in October. This follows estimated net inflows of Rmb 0.1 billion in September. October’s inflows further narrow YTD estimated net outflows from this ETF to Rmb 3.5 billion.

New Launches and Listings

EIP, Mirae Delist 2 ETFs in Hong Kong

On 9 October, Enhanced Investment Products (EIP) ceased the trading of the XIE GARY ETF (03102) from the Stock Exchange of Hong Kong. It cited the relatively small net asset value (HKD 24.8 million as of 5 September 2018) as the main factor leading to the delisting.

On 16 October, Mirae Asset ceased the trading of the Mirae Asset Horizons S&P Global Consumer Brands ETF (03056). The relatively small net asset value (HKD 49.5 million as of 16 August 2018) of the ETF was cited as one of the reasons behind the termination.

Invesco Delists an ETF in China

On 25 October, an ETF managed by Invesco Great Wall, which tracked the SSE 180 Equal Weight Index, ceased trading on the Shanghai Stock Exchange.

Ping An-UOB, HuaAn List 2 ETFs in China

On 22 October, Ping An-UOB Fund Management listed an ETF on the Shenzhen Stock Exchange, which tracks the Hang Seng China Enterprises Index.

On 26 October, HuaAn Funds listed an ETF on the Shanghai Stock Exchange, tracking the MSCI China A International Index.

These listings put the total number of ETFs listed in China at 182 (55 ETFs on the SZSE, 127 ETFs on the SSE).

Yuanta, Capital, CTBC List 6 ETFs in Taiwan

On 3 October, Yuanta Securities Investment Trust listed a bond ETF on the Taipei Exchange, tracking the Bloomberg Barclays US 20+ Year AAA-A Corporate Bond Liquid Index.

On 22 October, Capital Investment Trust listed 3 bond ETFs. These ETFs track the ICE 15+ Year AAA-AA US Corporate Constrained Index, the ICE 15+ Year US Utility excluding Yankee Index, and the ICE International 15+ Year US Emerging Markets External Sovereign Index, respectively.

On 31 October, CTBC Investments listed 2 ETFs on the Taiwan Stock Exchange. These ETFs track the MSCI China Free 50 ex A&B Shares Index, and the MSCI China Free 50 ex A&B Shares Daily Leveraged (2X) Index, respectively.

These listings put the total number of ETFs listed in Taiwan at 142.

Korea Investment, Samsung, KB, Mirae List 9 ETFs in Korea

On 5 October, Korea Investment listed an ETF on the Korea Exchange tracking the KOSPI Index.

On 16 October, Samsung Asset Management, KB Asset Management and Mirae Asset each listed a pair of leveraged/inverse ETF tracking the 2x performance of the KRX300 Index and the inverse performance of the F-KRX300 Index, respectively.

On 19 October, Samsung Asset Management listed an ETF tracking the S&P 10-Year U.S. Treasury Note Futures KRW Excess Return Index.

On 25 October, Korea Investment listed an ETF which tracks the Morningstar Wide Moat Focus Index*.

These listings put the total number of ETFs listed in Korea at 408.

SBI Lists an ETF in India

On 3 October, SBI Funds Management listed an ETF on the Bombay Stock Exchange, which tracks the S&P BSE SENSEX NEXT 50 Index.

Lyxor Delists 2 ETFs in Singapore

During the month, Lyxor Asset Management delisted 2 ETFs from the Singapore Exchange, which tracked the MSCI Indonesia Net Total Return Index and the SET 50 Net Total Return Index, respectively. Insufficient investor demand was cited as the reason for the liquidation of the share classes.

Phillip Lists an ETF in Singapore

On 29 October, Phillip Capital Management listed an ETF on the Singapore Exchange, tracking the Morningstar Singapore Yield Focus Index*.

This listing put the total number of ETFs listed in Singapore at 58.

ETFs Launched in October 2018 in the Asia ex-Japan Region

 

About Author Jackie Choy

Jackie Choy  

is the director of ETF Research for Morningstar Investment Management Asia