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Asia ETF Roundup (Industry) –March 2018

Bloomberg Barclays to include RMB-denominated bonds to its international indices; RQFII ETFs register Rmb 1.5 billion of net outflows; 21 new ETFs listed in Korea.

Jackie Choy 12/04/18

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

ETF Industry News

Bloomberg Barclays to Include RMB-denominated government and policy bank securities to Its International Indices
On 23 March, Bloomberg announced that Chinese RMB-denominated government and policy bank securities will be included in the Bloomberg Barclays Global Aggregate Index, Global Treasury Index, and EM Local Currency Government Index beginning in April 2019. The inclusion will occur over a 20-month period, with a scaling factor of 5% which will increase in 5 percentage point increments each month. Upon full inclusion, the index would include 386 Chinese securities and represent 5.49% of the value of the Bloomberg Barclays Global Aggregate Index (using January 2018 data).

However, the inclusion is not without prerequisites. In the announcement, Bloomberg stated that there are further enhancements that the Chinese regulators need to implement before inclusion can proceed, these include: (1) the implementation of delivery versus payment settlement, (2) the ability to allocate block trades across portfolios, and (3) clarification on tax collection policies. We view the inclusion of China onshore government debt into international bond indices as another big step forward in China’s opening of its domestic capital markets. For details, please refer to our full article.

 

RQFII ETF Watch – NetOutflows Totaled Rmb 1.5 billion in March

  • RQFII ETFs recorded estimated net outflows of Rmb 1.5 billion in March (5% of beginning AUM), which compares with net outflows of Rmb 4.0 billion in February. This puts YTD estimated net outflows from RQFII ETFs in Hong Kong at Rmb 5.8 billion.
  • Net outflows came mainly from the CSOP FTSE China A50 (82822/02822) and the ChinaAMC CSI 300 ETF (83188/03188), estimated at Rmb 1.0 billion and Rmb 0.5 billion, respectively.
  • The largest A-Share ETF by AUM in Hong Kong, iShares FTSE A50 China Index ETF (02823/82823), continued to experience net outflows in March, recording estimated net outflows of Rmb 0.9 billion in March. This compares to the estimated net outflows of Rmb 3.3 billion in February.  Estimated net outflows from this ETF have totaled Rmb 7.8 billion for the year to date through the end of March.

 

New Launches and Listings

Invesco Delists 3 ETFs in China
On 2 March, two ETFs from Invesco Great Wall ceased to trade on the Shanghai Stock Exchange. They tracked the CSI 800 Food and Beverage Index and the CSI Healthcare Index, respectively.

On 20 March, an ETF from Invesco Great Wall that tracked the CSI 300 Equal Weight Index ceased to trade on the Shenzhen Stock Exchange.

CCB, China Southern List 2 ETFs in China
On 7 March, CCB Principal Asset Management listed an ETF on the Shenzhen Stock Exchange that tracks the ChiNext Index.

On 15 March, China Southern Asset Management listed an ETF on the Shenzhen Stock Exchange, which tracks the Hang Seng China Enterprises Index.

These listings put the total number of ETFs listed in China at 167 (54 ETFs on the SZSE, 113 ETFs on the SSE).

Korea Investment, KIWOOM, Samsung, Dongbu, HI, KB, Shinhan, Mirae, Hanwha, NH-Amundi List 21 ETFs in Korea
On 9 March, Korea Investment listed a synthetic ETF on the Korea Exchange that tracks the MSCI Mexico IMI 25/50 Price return Index.

On 16 March, KIWOOM Asset Management listed 3 ETFs, which include a pair of leveraged and inverse ETFs. All 3 ETFs are benchmarked to the F-KOSDAQ150 Index.

On 16 March, Samsung Asset Management listed an ETF that tracks the Hang Seng China Enterprises Futures Index.

On 20 March, Dongbu Asset Management listed an ETF that tracks the KOSPI 200 Covered Call ATM Index. 

On 23 March, Samsung Asset Management listed an ETF that tracks the SGX Emerging Markets Futures Index. KB Asset Management also listed an ETF that tracks the Hang Seng China Enterprises Futures Index.

On 26 March, HI Asset Management, KB Asset Management, Shinhan BNP Paribas, Mirae Asset, Hanwha Asset Management, and Samsung Asset Management each listed ETFs tracking the KRX 300 Index. The KRX 300 Index was launched in February 2018 and is designed to reflect the performance of 300 representative stocks listed on the KOSPI and KOSDAQ market. This free-float market-cap weighted index includes some sector caps criteria and a liquidity screen.

On 30 March, Mirae Asset listed 6 ETFs, which track the FnGuide TOP10 Index, FnGuide Large Value Index, FnGuide Mid-Small Index, FnGuide Large Growth Index, FnGuide Mid-Small Value Index and FnGuide Mid-Small Growth Index. NH-Amundi Asset Management also listed an ETF which tracks the KOSPI 200 Index.

These listings put the total number of ETFs listed in Korea at 349.

Bangkok Capital Lists an ETF in Thailand
On 27 March, Bangkok Capital Asset Management listed an ETF on the Stock Exchange of Thailand that tracks the BCAP Mid Small Cap CG Index TR.

This listing puts the total number of ETFs listed in Thailand at 17.

 

About Author Jackie Choy

Jackie Choy  

is the director of ETF Research for Morningstar Investment Management Asia