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Asia-Pac (ex-Japan) ETP assets reach record USD94.6bn at end of Jan 2013


Assets invested in exchange-traded funds and exchange-traded products listed in Asia Pacific (ex-Japan) reached a new all-time high of USD94.1bn at the end of January 2013, according to figures released by ETFGI.

ETF and ETP assets have increased by 6.6 per cent from USD88bn in December 2012 to USD94.1bn at the end of January, according to figures from ETFGI’s monthly Asia Pacific (ex-Japan) ETF and ETP industry insights.

Market performance contributed to the increase in the value of assets held in ETFs and ETPs as 18 of the top 20 markets globally showed gains in January. Four of these indices were located in Asia Pacific (ex-Japan); the CSI 300 was up 6.5 per cent, the S&P/ASX 200 was up 4.9 per cent, the BSE Sensex 30 was up 2.4 per cent and the Hang Seng was up 4.7 per cent. Two other markets with strong gains were in the US and the UK where history has shown that a strong January tends to be a good predictor for the rest of the year. A review of history in both markets shows that strong January performance is typically followed by positive returns in the subsequent 11 months.

In January 2013, ETFs/ETPs listed in Asia Pacific (ex-Japan) saw net inflows of USD2.1bn. Equity ETFs/ETPs gathered the largest net inflows with USD1.8bn, followed by leveraged ETFs/ETPs with USD404m, and fixed income ETFs/ETPs with USD30m, while inverse ETFs/ETPs experienced the largest net outflows with USD148m.

“The flows into the equities show investors risk appetite is increasing as investors are feeling more confident as global economic concerns over corporate earnings, US debt ceiling, US housing market, US job outlook and the outlook for the Eurozone seem to be improving. There are signs of a rotation out of fixed income into equities,” says Deborah Fuhr, managing partner at ETFGI.

Within equities, emerging market equity ETFs/ETPs gathered the largest net inflows with USD2bn, while developed Asia Pacific equity ETFs/ETPs experienced the largest net outflows with USD185m.

In January 2013, fixed income ETFs/ETPs saw net inflows of USD30m. Government bond ETFs/ETPs gathered the largest net inflows with USD98m, followed by money market ETFs/ETPs with USD25m, while emerging market bond ETFs/ETPs experienced the largest net outflows with USD102m.

In January 2013, commodity ETFs/ETPs saw net inflows of USD3m. Precious metals ETFs/ETPs gathered the largest net inflows with USD14m, while broad commodity ETFs/ETPs experienced the largest net outflows with USD7m.

“A growing number of institutional investors, financial advisors and retail investors are embracing the use of ETFs and ETPs for strategic and tactical asset allocations. ETFs provide greater transparency in relation to costs, portfolio holdings, price, liquidity, product structure, risk and return compared to many other investment products and mutual funds,” says Fuhr.

At the end of January 2013, the Asia Pacific (ex-Japan) ETF/ETP industry had 432 ETFs/ETPs, with 554 listings, assets of USD94.1bn, from 92 providers on 14 exchanges. China AM gathered the largest net ETF/ETP inflows in January with USD2.6bn, followed by iShares with USD555m and Samsung AM with USD419m net inflows.

SPDR ETFs is the largest ETF/ETP provider in terms of assets with USD14.2bn, reflecting 15.1 per cent market share; iShares is second with USUSD10.8bn and 11.5 per cent market share, followed by China AM with USD9.2bn and 9.7 per cent market share. The top three ETF/ETP providers, out of 92, account for 36.4 per cent of Asia Pacific (ex-Japan) ETF/ETP assets, while the remaining 89 providers each have less than nine per cent market share.

CSI has the largest amount of ETF/ETP assets tracking its benchmarks with USD28bn, reflecting 29.8 per cent market share; FTSE is second with USD15.9bn and 16.9 per cent market share, followed by Hang Seng with USD15.2bn and 16.1 per cent market share.

ETF and ETP average daily trading volumes increased by 14.9 per cent from USD1.8bn in December 2012 to USD2.1bn in January 2013.

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