China-headquartered CSOP Asset Management is set to launch its fifth ETF – CSOP iEdge Southeast Asia+ TECH Index ETF (Stock Code: SGD counter: SQQ/ USD counter: SQU) on the Singapore Stock Exchange (SGX).
The firm writes that SQQ/SQU will adopt a representative sampling strategy to track the performance of the iEdge Southeast Asia+ TECH Index designed to capture the investment opportunities in the technology-related economy of the Southeast Asia and India market.
The ETF is available for investment on the primary market in SGD and trading in both SGD and USD at an inception price of SGD1 with a board lot size of 1 share. The initial investment size is around USD16.5 million, primarily from international institutional investors.
The firm writes that the Southeast Asia (SEA) and India technology economy has been attracting more attention from global investors. First and foremost, the region has become a new global manufacturing hub due to its favourable demographics and competitive labour costs, allowing it to take on the latest round of international industrial relocation, CSOP says, adding that the tech industry alone accounts for over 28 per cent of SEA’s exports at USD490 billion.
Additionally, internet adoption continues to grow in this world’s third-largest economy amid fast GDP growth and rising middle-class population. The combination of having a large young population along with the rapidly growing number of internet users, provides a potential client base for the growth of the digital economy. By 2030, SEA and India are expected to add 140 million new consumers, representing one sixth of the global consumer class, with the middle-class population reaching 67 per cent of the region’s total.
Furthermore, India’s digital economy grew at a CAGR of 16 per cent, while the digital economy in SEA grew at a CAGR of 24 per cent from 2019 to 2022, CSOP writes, adding that local grown technology giants such as Sea Ltd and Grab have also incubated huge potentials for investors.
CSOP writes that its iEdge Southeast Asia+ TECH Index ETF is the first ETF in Singapore to present ‘a remarkable investment opportunity within the thriving tech industry across the rapidly expanding regions of SEA and India’.
“By investing in this ETF, individuals can capitalise on the immense growth potential of emerging Asian markets while diversifying their portfolios within the dynamic tech sector,” the firm says.
Compiled and maintained by SGX Index Edge, iEdge Southeast Asia+ TECH Index is designed to track the performance of 30 largest technology or innovative companies based in India, Singapore, Indonesia, Thailand, Vietnam, and Malaysia. The index includes listed companies mainly in technology-related sectors such as IT, software, consulting, car manufacturing, electronic components, manufacturing, retail, and media services. It is a free float market capitalisation-weighted index with a 10 per cent stock cap on each constituent. The index has delivered an annualised return of 28.34 per cent, CSOP says.
Michael Syn, Senior Managing Director and Head of Equities, SGX Group, said, “Nowhere in the world is the pace of digital transformation faster than in South and Southeast Asia, and investors are taking note. This ETF provides investors exposure to some of the most innovative and fast-growing technology companies, enabling access to exciting growth opportunities in these markets and portfolio diversification benefits at the same time. Tomorrow’s successful launch also demonstrates CSOP Asset Management’s commitment to build a multi-asset product suite on SGX and we look forward to continuing our partnership with them to deliver more investment options for investors.”
CSOP Asset Management’s CEO, Ding Chen comments, “This marks CSOP’s fifth ETF product in Singapore, and we express our gratitude to SGX for their support. This ETF presents an enticing opportunity for investors to capitalise on the rapid growth of Southeast Asia and India. The successful listing of the ETF will enhance Singapore’s ETF market and cater to the demands of discerning investors.”