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Asia Pacific ETFs get chunk of global ETF flows

Exchange-traded funds listed in Europe and Asia-Pacific and launched in January collected about 90% of the $526m worth of inflows into new assets, according to data from Markit.
Fund Selector Asia

In Asia-Pacific, ETFs attracted $330.5m worth of inflows in January, the global financial information services company said.

Out of that total, equity asset inflows were $106.3m and fixed income inflows tallied to $224.2m.

The entire fixed income inflow went into the CSOP China Ultra Short Term Bond ETF, representing 43% of global inflows into new funds launched in January.

The CSOP ETF aims to provide returns that correspond to the performance of the Citi Chinese Government and Policy Bank Bond 0-1 Year Select Index. The Hong Kong-domiciled fund was listed on the Hong Kong Stock Exchange on 20 January, according to the data on the fund house’s web site.

As per asset allocation on 6 March, the fund had 96% of its assets allocated into securities with less than one-year duration, whereas those with above one-year duration was 3.9%.

A look at the performance of the CSOP ETF since launch, according to FE Analytics data:


On the equity side, Markit said Daiwa ETF Japan Nikkei225 Double Inverse Index, which saw $43.3m worth of inflows, was the lead gainer. The fund was listed on the Tokyo Stock Exchange on 6 January.

There were three more equity Japan-listed ETFs launches from Daiwa during the review period, which collectively attracted $27.6m worth of inflows.

A look at the January fund flows according to Markit data:


February ETF launch review

According to Markit, global ETF launch momentum continued in February with 45 new listings compared to 34 in January. This took the total number of exchange-traded products globally to 6107.

While the majority of ETFs launched in February were geographically focused on the US and Canada, there were also four ETFs with investment exposure in European markets as well as four focused on Japan.

A look at the chart provided by Markit on funds launched in February:


The four ETFs investing in Japanese equities are: Source JPX-Nikkei 400 UCITS ETF EUR, Source JPX-Nikkei 400 UCITS ETF USD Hedged, Lyxor ETF JPX Nikkei 400 Part B GBP an Lyxor ETF JPX Nikkei 400 Part B USD Hedged.

The Asia-Pacific listed products were: UBS IQ MSCI Europe Ethical ETF and UBS IQ MSCI Australia Ethical ETF both being listed on the Australian bourse. Kodex HIS Futures ETF and Kodex HIS Futures ETF RMB FX ETF were the ones listed on Hong Kong exchange.

The Hong Kong Exchanges and Clearing waived the stamp duty on all exchange-traded funds listed in Hong Kong from 13 February to promote the development of the ETF market.

With the opening of the Stock Connect, Rob Hughes, head of index and advisor solutions at Nasdaq, earlier told Fund Selector Asia there is big potential for exchange-traded funds in Hong Kong as well as in China.

In November, BMO Global Asset Management launched three Hong Kong-domiciled ETFs.

Prior to that, Vanguard unveiled three ETFs in Hong Kong in June 2014, including the SAR’s first ETF providing investors with exposure to European equities.

According to a survey by PwC, the assets under management of exchange-traded funds globally are forecast to double to $5trn, with Asia offering fragmented opportunities.

Part of the Mark Allen Group.