Asia ETF Roundup (Industry) – December 2014 and January 2015

Hong Kong Policy Address Removed Capital Investment Entrant Scheme – 16 ETFs were on the Eligible List
On 14 January 2015, the Chief Executive of Hong Kong delivered the 2015 Policy Address and announced the suspension the Capital Investment Entrant Scheme with effect from 15 January 2015. The Scheme was designed to facilitate the entry for residence in Hong Kong by capital investment entrants, i.e. persons who make capital investment in Hong Kong through choosing of investments amongst permissible assets without the need to establish or join in a business.

The list of eligible collective investment schemes can be found here. There were 16 ETFs on the list. 

MSCI to Consider “Foreign Listed Companies” Eligible for the MSCI Country Indices
On 15 January 2015, MSCI announced the conclusions from the consultation on the enhancements to the coverage of the MSCI Global Investable Market Indexes (GIMI). The enhancement includes considering the companies traded outside of the country of classification (i.e., "foreign listed companies") to be eligible for inclusion in the MSCI GIMI and the MSCI Country indices. For example, Alibaba Group (BABA, listed in the US) will be eligible for potential inclusion in both the MSCI China Index and the MSCI Emerging Markets Index. Specifics of the enhancement can be found here and the consultation, with preliminary simulations on the changes, can be found here.

Switzerland Granted with RQFII Quota of Rmb 50 Billion
In January, Switzerland was granted RQFII quota (Rmb 50 billion) which will enable qualified Swiss investors to invest directly into the China securities market. Other countries with RQFII quota include: Hong Kong (Rmb 270 billion), Taiwan (Rmb 100 billion; received a favourable response from the Chinese government but have not yet been officially granted quota), the UK (Rmb 80 billion), Singapore (Rmb 50 billion), France (Rmb 80 billion), South Korea (Rmb 80 billion), Germany (Rmb 80 billion), Qatar (Rmb 30 billion), Canada (Rmb 50 billion) and Australia (Rmb 50 billion).

RQFII ETF Watch – Largest Monthly Net Outflows in December, at Rmb 21.6 billion, from RQFII ETFs, and another Rmb 6.8 billion in January

• In December 2014, RQFII ETFs recorded the largest net outflows, estimated at Rmb 21.6 billion (36% of beginning and 41% of ending AUM), followed by Rmb 6.8 billion of net outflows in January 2015. Total net outflows from RQFII ETFs since October 2014 were estimated at Rmb 40.2 billion.
• In the month of December 2014 and January 2015, the majority of the net outflows came from the CSOP FTSE China A50 ETF (82822 & 02822), estimated at Rmb 20.5 billion, followed by the Bosera FTSE China A50 Index ETF  (82832 & 02832), estimated at Rmb 3.9 billion and ChinaAMC CSI 300 Index ETF (83188 & 03188), estimated at Rmb 2.2 billion.
• The largest A-Share ETF by AUM in Hong Kong, iShares FTSE A50 China Index ETF (02823), also recorded large net outflows estimated at Rmb 9.3 billion in December and Rmb 10.6 billion in January. Total net outflows from October 2014 were estimated at Rmb 24.5 billion.
• New RQFII ETF – On 20 January 2015, CSOP launched a China bond ETF, namely the CSOP China Ultra Short-Term Bond ETF (83122 & 03122). The ETF tracks the Citi Chinese Government and Policy Bank Bond 0-1 Year Select Index.

New Launches and Listings

Mirae, Dongbu, Samsung, Korea Investment and Hanwha List 7 ETFs in Korea
On 5^th and 17^th December 2014, Mirae Asset listed two ETFs on the Korea Exchange (KRX), namely the TIGER HIGH DIVIDEND ETF (A210780) and the TIGER DIVIDEND Growth ETF (A211560). The ETFs track the KOSPI High Dividend Yield 50 Index and the KOSPI Growth Dividend 50 Index, respectively.

On 12 December 2014, Dongbu Asset Management listed its second ETF on the KRX, namely the Mighty KOSPI High Dividend Yield ETF (A211210). The ETF tracks the KOSPI High Dividend Yield 50 Index.

On 17 December 2014, Korea Investment listed the KINDEX Dividend Growth ETF (A211260) on the KRX. The ETF tracks KOSPI Growth Dividend 50 Index. 

On 17 December 2014 and 8 January 2015, Samsung listed two ETFs on the KRX, namely the KODEX Dividend Growth ETF (A211900) and the KODEX Sams Value ETF (A213610). The ETFs track the KOSPI Growth Dividend 50 Index and the WISE Samsung Group Value Index, respectively.

On 26 January 2015, Hanwha Asset Management listed an ETF on the KRX, namely the ARIRANG SYNTH-US High Dividend(H) ETF (A213630). The ETF tracks the Dow Jones U.S Select Dividend Index.

These 7 ETFs add to the Korean strategic beta ETP menu and put the total number of ETFs in Korea at 174.

Maybank Lists 4 ETFs in Thailand
On 15 December 2014, Maybank Asset Management listed four ETFs on the Stock Exchange of Thailand which offer exposure to the overseas markets. The four ETFs, the Maybank US ETF (MUS), the Maybank Euro ETF (MEU), the Maybank Japan ETF (MJP) and the Maybank Emerging ETF (MEM) are feeder funds investing into the iShares Core S&P500 ETF, the iShares MSCI EMU ETF, the iShares MSCI Japan ETF and the iShares MSCI Emerging Markets ETF, respectively.

These 4 ETFs put the total number of ETFs in Thailand at 21.

HFT, GF Fund, China Southern and ChinaAMC Lists 4 ETFs in China
On 16 December 2014, HFT Investment Management listed an ETF on the Shanghai Stock Exchange namely the HFT SSE Pledge Urban Investment Bond ETF (511220). The ETF tracks the SSE Pledgeable Urban Construction Investment Bond Index.

On 8 January 2015, GF Fund listed an ETF on the Shenzhen Stock Exchange, namely the GF CSI All Share Healthcare ETF (159938). The ETF tracks the CSI All Share Healthcare Index.

On 26 January 2015, China Southern and ChinaAMC listed two ETFs on the Shanghai Stock Exchange, namely the China Southern Hang Seng Index ETF (513600) and ChinaAMC Shanghai-Hong Kong Stock Connect Hang Seng Index ETF (513660), respectively. Both ETFs track the Hang Seng Index and are the first ETFs in China to utilise the Shanghai-Hong Kong Stock Connect to trade the index constituents.

These ETFs put the total number of ETFs in China at 99.

CSOP Lists a Bond ETF and a Tech ETF in Hong Kong
On 20 January 2015, CSOP Asset Management listed a bond ETF on the Stock Exchange of Hong Kong, namely the CSOP China Ultra Short-Term Bond ETF (RMB counter 83122; HKD counter 03122). The ETF tracks the Citi Chinese Government and Policy Bank Bond 0-1 Year Select Index.

On 28 January 2015, COSP Asset Management listed a tech ETF on the Stock Exchange of Hong Kong, namely the CSOP MSCI T50 ETF (03021).The ETF tracks the MSCI China and USA Internet Top 50 Equal Weighted Index. The index is designed to reflect the performance of the 50 largest internet software and services and internet retail entities selected by full market capitalisation listed on the Stock Exchange of Hong Kong, the New York Stock Exchange (“NYSE”), the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market and the NYSE Market LLC, and applying equal weighting on each constituent. Constituents include Google (GOOG and GOOGL; listed in the US), Alibaba (BABA; listed in the US), Facebook (FB; listed in the US), Amazon (AMZN; listed in the US) and Tencent (00700; listed in HK), etc.

The listing of these ETFs put the total number of ETFs listed in Hong Kong at 122 (142 listings).       

List of ETFs Launched in December 2014 and January 2015

Looking back at the year 2014, there were 73 listings in the Asia ex-Japan region, with Korea being the market launched the most ETFs (26 ETFs), followed by China (16 ETFs) and Hong Kong (12 ETFs with 18 listings). During the year, Vietnam also had its first locally domiciled ETF launched.

No. of ETFs launched by Country/Region in 2014