Global X Funds has launched the Global X FTSE ASEAN 40 ETF (Ticker: ASEA), the first ETF listed in the US to target the Association of Southeast Asian Nations (ASEAN).
As of February 11, 2011, the index break down was: Singapore (41.19%), Malaysia (32.82%), Indonesia (14.77%), Thailand (10.58%), and the Philippines (0.61%).
The Southeast Asian nations have profited from considerable growth and a combined market capitalisation of USD1.75 trillion in 2010, larger than that of both India and Brazil (World Federation of Exchanges). The fund allows investors to tap into the ongoing economic integration in the region, which has contributed to the 111% rise in M&A deals between ASEAN companies to USD53.7bn (Financial Times, 2011). To further aid integration there is a planned cross-border trading platform slated for 2011, which includes the stock exchanges in Singapore, Malaysia, Thailand and the Philippines.
In addition, the region enjoys a stronger relationship with China, as the Asian giant seeks to develop the China-ASEAN Free Trade Area (CAFTA) (Guangxi Regional Government, 2011), as well as an increase in imports from ASEAN, which increased by nearly 45% in 2010 (China Daily, 2011).
“We are pleased to provide access to the ASEAN market for US investors,” said Bruno del Ama (pictured), CEO of Global X Funds. “This is one of the most dynamic regions in the world with accelerating consumer demand that should develop a middle class of about 300 million people by 2015.”
The Global X FTSE ASEAN 40 ETF seeks to provide investment results that correspond generally to the price and yield performance of the FTSE/ASEAN 40 Index. The FTSE/ASEAN 40 Index tracks the performance of the 40 largest companies in the five ASEAN countries: Singapore, Malaysia, Indonesia, Thailand and the Philippines. As of February 3, 2011 the three largest components for ASEA were DBS Group Holdings, Singapore Telecom, and Oversea-Chinese Banking.