MENU

Exchange Traded Fund Highlights of 2013

My Gateway (92 x 92) As of the end of 2013, there are 633 Exchange Traded Products (ETPs) listed across Asia Pacific with 500 tracking equity indices. This was reported in the ETF Landscape publication by Blackrock released last week. There are 89 ETFs currently listed on SGX and the majority of these track the performance of equity indices.

These SGX listed ETFs track a very broad range of Asia Pacific indices. Of all the exchanges in the Asia Pacific, ETFs listed SGX offer the most diversified range of equity index coverage. Hence it would be of little surprise to investors that the ten ETFs with the most turnover in 2013 included two ETFs tracking the Straits Times Index (STI) and as many as six ETFs tracking equity indices within the region. The ten ETFs with the most active turnover in 2013 are detailed in the table below. Together these 10 ETFs accounted for four-fifths of all SGX listed ETF turnover in 2013.

No Name

Turnover (S$)

% Total

1

SPDR® GOLD SHARES

1,068,925,873

32.90%

2

ISHARES MSCI INDIA INDEX ETF*

712,249,105

21.90%

3

SPDR® STRAITS TIMES ETF

155,816,790

4.80%

4

DBXT CSI 300 UCITS ETF

146,919,901

4.50%

5

LYXOR ETF CHINA ENTERPRISE (HSCEI)

141,154,398

4.30%

6

DBXT MSCI AC ASIA EX JAPAN INDEX UCITS ETF

98,791,208

3.00%

7

NIKKO AM SINGAPORE STI ETF

80,499,454

2.50%

8

ISHARES BARCLAYS CAPITAL USD ASIA HIGH YIELD BOND INDEX ETF*

80,111,305

2.50%

9

CIMB FTSE ASEAN 40 ETF*

76,575,551

2.40%

10

DBXT FTSE VIETNAM UCITS ETF

75,452,139

2.30%

Source: SGX * note dual currency counters

As shown above SPDR® GOLD SHARES was the most active ETF in 2013, which was also the case over the previous two years. Gold has been used by portfolio managers as a diversifier to equity and debt positions. The price of Gold might has moved from US$700/ounce level during the advent of the systemic financial difficulties in October 2008 to US$1900/ounce in September 2011 and ended last year near US$1200/ounce. Also underpinning participation of SPDR® GOLD SHARES listed on SGX, is the fact that more than half of the world’s investment demand for Gold comes from five countries in the region – India, China, Thailand, Vietnam and Indonesia.

Asia-Pacific still has some ways to go to approach ETF demand levels of the United States (US). While the ETF Landscape report reported 1536 ETPs in the US to Asia Pacific’s 633 – at US$1.7 trillion, the Assets under Management (AUM) of ETPs in the US was ten times that of Asia Pacific.

Nevertheless, ETFs provide an investment fund that is efficient, transparent and flexible. Efficiency is best exemplified through the ability to achieve index replication and diversification in one single security, which is traded like a stock. Day to day transparency exists as investors can see the composition of the fund with most ETFs publishing their exact holdings on a daily basis. Flexibility allows investors to enter or exit the ETF at market prices during market trading hours.

Net Asset Value (NAV) is determined at the daily close of trading of all market(s) that ETF is invested in, with the process typically explained in the formal documentation associated with the ETF. The NAV per unit divides the daily total net assets of the ETF by the number of outstanding ETF units available in the marketplace.

The NAV changes in 2013 for the ten most active ETFs in 2013 are detailed in the table below. Note the NAV performances do not include dividend distributions made in the course of 2013 for SPDR STI ETF, Nikko AM Singapore STI ETF, DBXT CSI 300 UCITS ETF, iShares Barclays Capital USD Asia High Yield Bond Index ETF and the CIMB FTSE ASEAN 40 ETF.

No Name

NAV change 2013 (%)

1

SPDR® GOLD SHARES

-28.1

2

ISHARES MSCI INDIA INDEX ETF*

-4.9

3

SPDR® STRAITS TIMES ETF

-0.6

4

DBXT CSI 300 UCITS ETF

-7.0

5

LYXOR ETF CHINA ENTERPRISE (HSCEI)

-3.1

6

DBXT MSCI AC ASIA EX JAPAN INDEX UCITS ETF

2.1

7

NIKKO AM SINGAPORE STI ETF

-0.1

8

ISHARES BARCLAYS CAPITAL USD ASIA HIGH YIELD BOND INDEX ETF*

-5.1

9

CIMB FTSE ASEAN 40 ETF*

-7.7

10

DBXT FTSE VIETNAM UCITS ETF

13.6

Source: SGX * note dual currency counters

SGX offers an ETF screener that allows investors to gather targeted information on ETFs that suit their objectives.

As part of the Monetary Authority of Singapore’s (MAS) initiative to safeguard the interests of individual investors, most ETFs are categorised as Specified Investment Products (SIPs). Investors who wish to trade SIPs are required to be pre-qualified by their brokers through a customer account review or take the SGX Online Education Programme. There are also a number SGX ETFs are classified as Excluded Investment Products (EIP), which don’t require retail investors to be pre-qualified by their brokers before investment.

Click here now  for your  FREE subscription to Take Stock Singapore, The Motley Fool’s free investing newsletter. Written by  David Kuo ,   Take Stock Singapore  tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.  

This article was contributed by SGX My Gateway. Click   here   to register.

Like us on Facebook   to keep up-to-date with our latest news and articles. The Motley Fool’s purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.