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Asia ETF Roundup (Industry) – March 2020

BOJ doubles ETF purchase limit.

Jackie Choy, CFA 08/04/20

For economic and market news relating to Asian ETFs, please refer to our “Asia ETF Roundup (Market) – March 2020”.

ETF Industry News

BOJ Doubles ETF Purchase Limit Along with Monetary Easing Enhancements

On 16 March, the Bank of Japan announced a series of enhancements to its monetary stimulus programme in response to the outbreak of COVID-19. The BOJ doubled its annual purchase limit to JPY 12 trillion from the previous limit of JPY 6 trillion. The enhancements also include further purchases of Japanese Government Bonds and J-REITs. Recall that the BOJ has been purchasing ETFs under its easing program since late 2010. As of 31 December 2019, it held JPY 28.2 trillion worth of ETF shares (stated at cost, according to the Bank of Japan; or US$260 billion). This accounted to 65% of the total assets under management in the ETF market in Japan.

Chinese Equity ETF Watch – HK-Domiciled Chinese Equity ETFs See Estimated USD 0.3 billion Net Outflows from Offshore Markets and USD 0.5 billion Net Outflows from Onshore Markets

  • Hong Kong-domiciled ETFs in the China Equity Category saw estimated net outflows of USD 0.3 billion in March, coming mainly from the iShares Core MSCI China Index ETF (02801). Meanwhile, ETFs in the China Equity – A-Shares Category saw estimated outflows of USD 0.5 billion, coming mainly from the iShares FTSE A50 China Index ETF (02823/82823).
  • For the first three months of 2020, Hong Kong-domiciled ETFs in the China Equity Category and the China Equity – A-Shares Category saw estimated outflows of USD 0.5 billion and USD 1.6 billion, respectively.
  • In the U.S. in March, on the other hand, we saw an estimated USD 0.4 billion of net inflows from the iShares China Large-Cap ETF (FXI) and the iShares MSCI China ETF (MCHI) and an estimated USD 0.2 billion of net inflows from the Xtrackers Harvest CSI 300 China A ETF (ASHR).

New Launches and Listings

Hong Kong: CSOP Delisted a USD Counter of a Bond ETF; CSOP and Shanxi Securities Listed 2 ETFs

  • The USD counter of the CSOP Bloomberg Barclays China Treasury + Policy Bank Bond Index ETF (09199) had its last trading day on the Hong Kong Exchange on 23 March. Small asset size and the low trading volume were cited as main factors in determining the termination of the USD counter of the ETF.
  • On 19 March, CSOP Asset Management listed an ETF tracking the CSI 500 Index.
  • On 27 March, the CSOP RMB Money Market ETF (83122/03122) launched two unlisted share classes, with management fee at 0.49% and 0.80%, respectively. This is compared to the 0.49% management fee charged by the ETF share class.
  • On 27 March, Shanxi Securities listed an ETF tracking the DCE Iron Ore Futures Price Index.
  • Including the above ETF delisting and listings, the total number of ETF listings in Hong Kong stands at 204 (130 ETFs, 74 multiple counters, including 24 L&I Products).

Taiwan: Cathay Listed a Thematic ETF

  • On 30 March, Cathay Securities Investment Trust listed a thematic ETF on the Taiwan Stock Exchange. The ETF tracks the Nasdaq ISE Cyber Security Index.
  • This listing put the total number of ETFs listed in Taiwan at 224, of which 104 of them are bond ETFs.

China: 11 ETF New Listings

  • Chinese ETF providers listed 11 ETFs on the Shanghai Stock Exchange and the Shenzhen Stock Exchange, including 4 broad market ETFs, 1 sector ETF and 6 thematic ETFs. 
  • These listings put the total number of ETFs listed in China at 301 (88 ETFs on the SZSE, 213 ETFs on the SSE).

ETFs Launched in March 2020 in the Asia ex-Japan Region  

About Author Jackie Choy, CFA

Jackie Choy, CFA  

Jackie Choy, CFA is the Director of ETF Research for Morningstar Investment Management Asia