Asia ETF Roundup (Industry) – December 2019 & January 2020

Consultation on HSI and HSCEI to include WVRs, Secondary-listed Companies

On 13 January 2020, Hang Seng Indexes Company released a consultation paper covering the following:

• The positioning of the Hang Seng Index (HSI)
• The eligibility of Weighted Voting Right (WVR) companies for HSI
• The eligibility of secondary-listed companies for the HSI
• The weighting of the financials sector (48% of HSI), including if a cap should be introduced.
• Other matters related to the Hang Seng China Enterprises Index (HSCEI), including the eligibility of WVRs and Secondary-listed Companies for the HSCEI, whether the additional eligibility screenings for Red-chips and P-chips in the index should be changed.

Currently, there are three WVR companies in Hong Kong, including Alibaba (09988) with a market cap of HK$4,446.9 billion, which is also a secondary-listed company, followed by Meituan (03690) and Xiaomi (01810), with market caps of HK$591.8 billion and HK$259 billion, respectively, as of end-2019.

The consultation will be open until 13 March 2020 and the results will be announced in May 2020. More details can be found here.

MSCI Confirms It Will Reclassify Kuwait to Emerging Markets

MSCI announced it will reclassify the MSCI Kuwait Index to Emerging Markets status in one step as part of its May 2020 semi-annual index review. Kuwaiti stocks will have a pro forma weight of 0.69% in the MSCI EM Index. Recall that in June 2019, MSCI had decided to such reclassify Kuwait, subject to omnibus account structures and same National Investor Number cross trades being made available for international institutional investors. The confirmed reclassification by MSCI was triggered by the implementation of these two enhancements. The press release can be found here.

Chinese Equity ETF Watch – HK-Domiciled Chinese Equity ETFs See Estimated USD 0.5 billion and USD 1.7 billion Net Outflows from Offshore Markets and Onshore Markets, Respectively, in 2019

• In 2019, among ETFs domiciled in Hong Kong, we estimated net outflows of USD 0.5 billion from ETFs within the China Equity Morningstar Category. We estimate net outflows of USD 1.7 billion from the China Equity – A-Shares Category.
• By way of comparison, looking at the U.S. ETF market, the two largest ETFs by AUM offering broad Chinese offshore equity exposure, namely the iShares China Large-Cap ETF (FXI) and the iShares MSCI China ETF (MCHI), experienced net outflows amounting to around USD 1.1 billion. The largest ETF by AUM with broad Chinese onshore equity exposure, namely the Xtrackers Harvest CSI 300 China A ETF (ASHR), on the other hand, gathered assets of around USD 0.5 billion.
• Looking at the first month of 2020, while estimated total figures were not complete as of the date of this report, the largest Hong Kong-domicilied ETF in the China Equity Category, the Hang Seng China Enterprises ETF (02828), saw estimated outflows of US$0.4 billion. Meanwhile the largest Hong Kong-domicilied ETFs in the China Equity – A-Shares Category, namely the iShares FTSE A50 China Index ETF (02823/82823), the ChinaAMC CSI 300 Index ETF (03188/83188) and the CSOP FTSE China A50 ETF (02822/82822), saw total estimated inflows of US$0.1 billion.
• In the U.S. in January, we saw an estimated USD 0.2 billion of inflows into the iShares China Large-Cap ETF (FXI) and the iShares MSCI China ETF (MCHI) and estimated USD 0.5 billion of inflows into the Xtrackers Harvest CSI 300 China A ETF (ASHR).

New Launches and Listings

KB, Korea Investment and NH-Amundi Listed 6 ETFs in Korea

On 19 December 2019, KB Asset Management listed 4 ETFs on the Korea Exchange. These ETFs track the F-KTB 3Y10Y Yield Curve Steepening Index (Total Return), the F-KTB 3Y10Y Yield Curve Steepening Index (Total Return), the F-KTB 3Y10Y Yield Curve Flattening Index (Total Return) and the F-KTB 3Y10Y Yield Curve Flattening Index (Total Return), respectively.

On 27 December, Korea Investment listed an ETF on the Korea Exchange. The ETF tracks the Morningstar Singapore REIT Yield Focus Income Protection Index.

On 16 January 2020, NH-Amundi listed an ETF on the Korea Exchange. The ETF tracks the KAP Ultra-long KTB Index (Total Return).

These listings put the total number of ETFs listed in South Korea at 451.

Mirae Listed 3 ETFs in Hong Kong; Value Partners Delisted 3 ETFs

On 17 January 2020, Mirae Asset Global Investments listed 3 ETFs on the Stock Exchange of Hong Kong. These ETFs track the Solactive China Clean Energy Index (Net Total Return), the Solactive China Consumer Brand Index (Net Total Return) and the Solactive China Electric Vehicle Index (Net Total Return), respectively.

Three Value Partners ETFs, namely the Value Japan ETF (03084), the Value Korea ETF (03041) and the Value Taiwan ETF (03060) had their last trading day on the Hong Kong Exchange on 16 December 2019. Relatively small total net asset value was cited as the main factor in determining the termination of these funds.

These listings and delistings put the total number of ETFs listed in Hong Kong at 204 (130 ETFs, 74 multiple counters, including 24 L&I Products).

PT Nusadana, PT BNI, PT Surya Timur Alam RayaListed 3 ETFs in Indonesia

On 5 December 2019, PT Nusadana Investama Indonesia listed an ETF on the Indonesia Exchange. The ETF tracks the IDX Value30 Index.

On 9 January 2020, PT BNI Asset Management listed an ETF on the Indonesia Exchange. The ETF tracks the MSCI ESG Leaders Indonesia Index.

On 31 January 2020, PT Surya Timur Alam Raya listed at ETF on the Indonesia Exchange. The ETF tracks to SRI-KEHATI Index.

These listings put the total number of ETFs listed in Indonesia at 40.

31 New ETF Listings in China

On 5 December 2019, China AMC listed an ETF on the Shenzhen Stock Exchange. The ETF tracks the Dalian Commodity Exchange Soybean Meal Futures Price Index.

On 6 December, Fullgoal Asset Management listed an ETF on the Shanghai Stock Exchange. The ETF tracks the CSI Technology 50 Strategy Index.

On 12 December, HFT Investment Management listed a bond ETF on the Shanghai Stock Exchange. The ETF tracks the SSE 5-Year Local Government Bond Index.

On 16 December, China Universal Fund Management listed an ETF on the Shanghai Stock Exchange. The ETF tracks the CSI 800 Index.

On 18 December, GF Fund Management, Harvest Fund Management and Bosera Funds listed 3 ETFs on the Shanghai Stock Exchange. The ETFs track the CSI Central-SOEs Technological Innovation Index.

ON 18 December, Fullgoal Asset Management listed an ETF on the Shenzhen Stock Exchange. The ETF tracks the CSI Central-SOEs Technological Innovation Index.

On 20 December, E Fund listed an ETF on the Shanghai Stock Exchange. The ETF tracks the CSI Dividend Index.

On 24 December, Dacheng Fund listed an ETF on the Shenzhen Stock Exchange. The ETF tracks the Shanghai Futures Exchange Non-ferrous Metal Futures Index.

On 24 December, China AMC and CPIC Fund Management listed 2 ETFs on the Shanghai Stock Exchange. The ETFs track the CSI Artificial Intelligence Index and the CSI 300 Index, respectively.

On 25 December, China Universal Fund Management and Zhongrong Fund Management listed 2 ETFs on the Shanghai Stock Exchange. The ETFs track the CSI 300 Index and the CSI 500 Index, respectively.

On 26 December, Tianhong Fund Management listed an ETF on the Shanghai Stock Exchange. The ETF tracks the CSI 300 Index.

On 27 December, China Merchants Fund Management an ETF on the Shanghai Stock Exchange. The ETF tracks the CSI Dividend Indexd.

On 2 January 2020, China Merchants Fund Management listed an ETF on the Shenzhen Stock Exchange. The ETF tracks the CSI 100 Index.

On 3 January, ICBC Credit Suisse Fund Management and China AMC listed 2 ETFs on the Shanghai Stock Exchange. The ETFs track the CSI 500 Index and the CSI All Share Real Estate Index, respectively.

On 10 January 2020, HuaAn Fund Management and ICBC Credit Suisse Fund Management listed 2 ETFs on the Shanghai Stock Exchange and the Shenzhen Stock Exchange, respectively. The ETFs track the CSI 300 Index and the Shenzhen 100 Index, respectively.

On 15 January, E Fund, Fullgoal Asset Management and China Universal Fund Management listed 3 ETFs on the Shanghai Stock Exchange. The ETFs track the CSI SOE One Belt & One Road Index.

On 17 January, Harvest Fund Management listed an ETF on the Shanghai Stock Exchange. The ETF tracks the CSI Advanced Manufacturing 100 Strategy Index.

On 17 January, ICBC Credit Suisse Fund Management, CCB Principal Asset Management and China Southern Asset Management listed 3 ETFs on the the Shenzhen Stock Exchange. The ICBC CS ETF and China Southern ETF track the the Guangdong-Hong Kong-Macao Greater Bay Area Innovation 100 Index and while the CCB Principal ETF tracks the ESZCE_ECIA.

On 20 January, Hony Horizon Fund and Yinhua Fund listed 2 ETFs on the Shenzhen Stock Exchange. The ETFs track the CNI Consumer 100 Index and the CNI Small-cap Value Index, respectively.

On 20 January, First Seafront Fund Management listed an ETF on the Shanghai Stock Exchange. The ETF tracks the CSI 500 Equal Weight Index.

These listings put the total number of ETFs listed in China at 277 (77 ETFs on the SZSE, 200 ETFs on the SSE).

Franklin Templeton SinoAm, Yuanta and KGI Listed 6 ETFs in Taiwan

On 13 December 2019, Franklin Templeton SinoAm Securities Investment Management listed two bond ETFs on the Taipei Exchange. The ETFs track the Bloomberg Barclays US Treasury 1-3 Year Total Return Index and Bloomberg Barclays US Corporates 10-25 Years Total Return Index, respectively.

On 9 January 2020, Yuanta Securities Investment Trust listed a bond ETF on the Taipei Exchange. The ETF tracks the ICE 15+ Year AAA-BB Large Cap US Emerging Markets External Sovereign Constrained Index.

On 9 January, KGI Securities Investment Trust listed three bond ETFs on the Taipei Exchange. The ETFs track the Bloomberg Barclays U.S. Treasury: 1-3 Year Total Return Index, the Bloomberg Barclays US Treasury 25+ Year Index and the Bloomberg Barclays US 15+ Year BBB Senior Corporate Capped Index, respectively.

These listings put the total number of ETFs listed in Taiwan at 224, of which 103 of them are bond ETFs.

ETFs Launched in December 2019 and January 2020 in the Asia ex-Japan Region