Development of Asian ETF Market

Transcription

1 Development of Asian ETF Market July 2015 Material prepared by CSOP Asset Management Limited.

2 Global Overview Number of ETFs Source: AUM Deutsche Bank, Bloomberg, Reuters, as of 17 Apr 2015 Turnover World Federation of Exchanges, for the period Mar 2015 YTD

3 Part 1 Hong Kong ETF Market

4 Overview Rank HKEx s ETF market is now ranked 2 nd by AUM and 3 rd by turnover in Asia Pacific. By Asia Pacific ETF AUM By Asia Pacific ETF Turnover Source: AUM Deutsche Bank, Bloomberg, Reuters, as of 17 Apr 2015 Turnover World Federation of Exchanges, for the period Mar 2015 YTD

5 Overview Turnover Growth HKEx s ETF market continued to enjoy strong growth in 2014 and ETF Average Daily Turnover and Number of Listed ETFs at HKEx Source: HKEx, as of end of Jun 2015

6 Overview Turnover Breakdown Turnover has been dominated by A-share ETFs but HK equity ETFs turnover has been increasing lately. ETF Average Daily Turnover by ETF Underlying Markets Source: HKEx, as of end of Apr 2015

7 ETF Products Managers 25 ETF managers across the globe are attracted to list ETFs in HK, with 130 ETFs issued Mainland A-Share: 11 CSOP Asset Management 6 BOCI-Prudential Asset Management 5 Ping An of China Asset Management (HK) 4 China Universal Asset Management (HK) 3 E Fund Management (HK) 3 Harvest Global Investments 3 China Asset Management (HK) 2 Bosera Asset Management (International) 1 CICC Hong Kong Asset Management 1 Da Cheng International Asset Management 1 Hai Tong Asset Management (HK) 1 Europe: 3 Deutsche Asset & Wealth Management Investment S.A. ETF Securities (HK) 3 35 Asia ex-mainland China: 7 Mirae Asset Global Investments (HK) 11 Enhanced Investment Products 8 Value Partners Hong Kong / Sensible Asset Management Hong Kong Hang Seng Investment Management 5 Samsung Asset Management (HK) 2 Yuanta Securities (HK) 1 Lippo Investments Management 1 North America: 4 BlackRock Asset Management North Asia 15 State Street Global Advisors 4 Vanguard Investments HK 4 BMO Global Asset Management (Asia) 3 6 HSBC Investment Funds (HK) 1 Source: HKEx, as of end of Jun 2015

8 ETF Products Product Range HKEx s ETF market offers a wide range of investment exposure covering various Equities & FICC. Mainland A-Share: 42 CSI 30 FTSE 4 CES 3 MSCI 2 HSI 1 SZSE 2 Hong Kong Equity: 20 HSI 7 CSI 6 FTSE 3 MSCI 3 NASDAQ 1 Source: HKEx, as of end of Jun 2015 Asia Pacific Equity: 43 Regional market 10 Regional sector 6 India 4 Korea 4 Taiwan 4 Indonesia 2 Japan 2 Malaysia 2 Philippines 2 Thailand 2 Bangladesh 1 Greater China 1 Pakistan 1 Singapore 1 Vietnam 1 Other Equity: 10 US 4 Global 3 Brazil 1 Europe 1 Russia 1 Fixed Income & Currency: 9 Mainland China RMB Fixed Income Asian Fixed Income 2 Currency 2 Hong Kong Fixed Income 1 Commodity: 6 Gold 4 Silver & Platinum 2 4

9 Billions HKD ETF Products Most Actively Traded ETFs The CSOP A50 ETF (2822) and X ISHARES A50 ETF (2823) are among the most actively traded stocks on HKEx HK Equity 2823 HK Equity Source: HKEx, as of July 20, 2015

10 ETF Products New Listings 7 ETFs have been newly listed in 2015 YTD Mainland China A-share: New Listings: Value China A-Share ETF (3095/83095) CSOP SZSE ChiNext ETF (3147/83147) Harvest CSI Smallcap 500 Index ETF (3150/83150) Conversion from Synthetic to Physical: W.I.S.E. SSE 50 China Tracker (3024) Asia Pacific & International Equity New Listings: CSOP MSCI T50 ETF (3021) XIE Shares FTSE Chimerica ETF (3161) Vanguard S&P 500 Index ETF (3140) Hong Kong Equity New Listings: KODEX HSI Futures ETF (3124) KODEX HSI Futures RMB FX ETF (3134) Fixed Income & Currency New Listings: CSOP China Ultra Short-Term Bond ETF (3122/83122) Source: HKEx, as of end of Jun 2015

11 ETF Products RQFII A-Share Hong Kong dominates the China RQFII ETF market globally by number, turnover and MC RQFII A-Share ETFs in Hong Kong, US and Europe Number 2015 YTD Turnover Market Capitalisation Source: Bloomberg, as of end of Mar 2015

12 ETF Derivatives on A-Share ETFs HKEx provides various complementary products on ETFs ETFs Stock Options Stock Futures Derivative Warrants CBBCs FTSE A50 CSOP FTSE China A50 (2822/82822) ishares FTSE A50 China (2823) Bosera FTSE China A50 Index ETF (2832/82832) (SO on 2822 & 2823) (SF on 2822 & 2823) (on 2822, & 2823) (on 2822 & 2823) CSI 300 W.I.S.E CSI 300 (2827) ChinaAMC CSI 300 (3188/83188) (SO on 2827, 3188) (SF on 3188) (on 3188) (on 3188) CES 120 E-Fund CES 120 (3120/83120) (IF)

13 ETF Derivatives on HK Equity & FICC ETFs HKEx provides various complementary products on ETFs ETFs Stock Options Stock Futures Derivative Warrants CBBCs HSI Tracker Fund of Hong Kong (2800) Hang Seng Index ETF (2833) KODEX HSI Futures (3124) KODEX HSI Futures RMB FX (3134) (IO, Mini IO, SO on 2800) (IF, Mini IF) (on HSI, 2800) (on HSI, 2800) HSCEI Hang Seng H-Share Index (2828) (IO, SO on 2828) (IF, Mini IF) (on HSCEI, 2828) (on HSCEI, 2828) Gold ETFS Physical Gold (2830) SPDR Gold Trust (2840) Value Gold (3081/83081) Hang Seng RMB Gold (83168) (on 2840)

14 Retail Investors Growth in Participation Rate 31% of stock investors (i.e. 11% of HK adult population) invested in ETFs in 2014 vs 21% in 2011 % of Stock Investors by Type Source: HKEx Retail Investor Survey 2014

15 Retail Investors Trading Pattern On average, ETF investors had more frequent transactions than equity investors Average No. of Transactions in the Past 12 Months Average Transaction Value Source: HKEx Retail Investor Survey 2014

16 ETF Retail Investors Profile Equity Investors Warrant Investors CBBC Investors ETF Investors Age Education background Tertiary or above Tertiary or above Tertiary or above Tertiary or above Monthly personal income Monthly household income ~$22,500 ~$22,500 ~$35,000 ~$22,500 ~$45,000 ~$45,000 ~$75,000 ~$45,000 Source: HKEx Retail Investor Survey 2014

17 Other Key Features HKEx is the bridge between China and global markets both strength and weakness HKEx provides various complementary products on ETFs, including warrant, CBBC, stock option and futures, which help the development of ETFs. The Dual Counter system (RMB and HKD) of some RQFII ETFs increases the trading volume in the secondary market, and the potential Triple Counter system (with USD) will make it more interesting for global investors to trade. Leveraged and Inverse ETFs launched Taiwan in What about Hong Kong? The CES China 120 index futures contract is a total solution to China investment. It is based on an underlying index that tracks both China s A-shares and China stocks listed in Hong Kong. New ETF products will be based on this index. Developments to make ETF listing process more efficient.

18 Part 2 Taiwan ETF Market

19 Overview Rank TWSE s ETF market is now ranked 6th by AUM and by turnover in Asia Pacific. By Asia Pacific ETF AUM By Asia Pacific ETF Turnover 46(20%) 69(18%) Source: AUM Deutsche Bank, Bloomberg, Reuters, as of 17 Apr 2015 Turnover World Federation of Exchanges, for the period Mar 2015 YTD

20 Overview Growth The average daily turnover of TWSE s ETFs is increasing rapidly from Taking into consideration of the exchange rate, the average daily turnover of TWSE s ETFs in 2014 is less than 10% of HKEx s (4,727 million HKD). Average Daily Turnover (NT$ million) 1,461 1, ,077 1, Source: TWSE, as of 23 July 2015

21 ETF Products Product Range TWSE has included leverage & inverse ETFs, which haven t appeared in Hong Kong market. Offshore ETF is launched by an offshore asset management firm and cross-listed on TWSE. Feeder Fund ETF is launched by a domestic securities investment trust enterprise and linked to an offshore ETF. Source: TWSE, as of 23 July 2015

22 ETF Products Product Range (Cont.) There are 28 ETFs in total listed on TWSE (vs 130 in Hong Kong). Domestic ETF: 12 Yuanta/P-shares Taiwan Top 50 ETF Yuanta/P-shares Taiwan Mid-Cap 100 ETF Fubon Taiwan Technology Tracker Fund Yuanta/P-shares Taiwan Electronics Tech ETF Yuanta/P-shares S&P Custom China Play 50 ETF Yuanta/P-shares MSCI Taiwan Financials ETF Yuanta/P-shares Taiwan Dividend Plus ETF Fubon MSCI Taiwan ETF Fubon Taiwan Eight Industries ETF Fubon Taiwan Finance ETF Yuanta/P-shares TWSE Taiwan Non-Tech 50 ETF Yuanta/ P-shares MSCI Taiwan ETF Sinopac TAIEX ETF Fubon FTSE TWSE Taiwan 50 ETF ETF comprising foreign securities: 6 Fubon SSE180 ETF (FB SSE180) Yuanta/P-shares SSE50 ETF Fuh Hwa CSI300 A Shares ETF (FH CSI300) W.I.S.E. Yuanta/P-shares CSI 300 ETF Cathay FTSE China A50 ETF Fubon SZSE 100 Index ETF Leveraged & Inverse ETF: 6 (3 pairs) Yuanta Daily Taiwan 50 Bull 2X ETF Yuanta Daily Taiwan 50 Bear -1X ETF Fubon SSE180 Leveraged 2X Index ETF Fubon SSE180 Inversed Index ETF Yuanta Daily CSI300 Bull 2X ETF Yuanta Daily CSI 300 Bear -1X ETF Offshore ETF: 3 Hang Seng H-Share Index ETF (HSHETF) Hang Seng Index ETF (HSIETF) W.I.S.E.-SSE50 China Tracker Hang Seng H-Share Index ETF (HSHETF) Hang Seng Index ETF (HSIETF) W.I.S.E.-SSE50 China Tracker Offshore ETF: 1 Yuanta S&P GSCI Gold ER Futures ETF Source: TWSE, as of 23 July 2015

23 Key Developments LP Program Although Taiwan s ETF market formally began in 2003, only a small portion of ETFs have any significant trading value. Thus, Liquidity Provider Program was launched in 2008 and 2014 to encourage liquidity Liquidity Provider Program ETF issuers (SITEs) could designate up to three LPs per ETF. Subject to certain performance criteria, LPs could receive rebates and monetary rewards from TWSE Liquidity Provider Program Minimum of one Liquidity Provider (Securities Firm) per designated ETF. Predefined quoting obligations. A monetary award is given to the top three liquidity providers for meeting predefined criteria for their designated ETFs. Source: TWSE, as of 23 July 2015

24 Key Developments L&I ETF Since the inception of the ETF market in Taiwan, ETF trading value as a proportion of total trading value on the centralized market has increased to 1.2% as of August 2014 from 0.17% in After launching inverse and leveraged ETFs in 2009 and 2010 respectively, Korea market saw ETF trading value as a proportion of total trading value on the centralized market shoot to 7.1% in 2011 from 2% in In Japan, the launch of leveraged and inverse ETFs in 2012 brought ETF trading value as a proportion of total trading value on Japan market up by five times to 3.64% in 2013 from 0.69% in Learning from the Korea and Japan market experience, TWSE introduced Leveraged & Inverse ETFs to its markets in Source: TWSE, as of 23 July 2015

25 Key Developments Other Developments In April 2015, the TWSE unveiled its first futures-based ETF, which tracks the prices of gold futures. Hong Kong also launched its first futures-based ETF, tracking Hong Kong underlyings this year. The TWSE has also established the multi-currency trading mechanism, through which ETFs can amass funds in Taiwan Dollars while being listed and traded in more than one currency. Source: TWSE, as of 23 July 2015

26 Part 3 Korean ETF Market

27 Overview Rank KRX s ETF market is now ranked 4 th by AUM and 5 th by turnover in Asia Pacific. By Asia Pacific ETF AUM By Asia Pacific ETF Turnover 46(20%) 69(18%) 36(10%) Source: AUM Deutsche Bank, Bloomberg, Reuters, as of 17 Apr 2015 Turnover World Federation of Exchanges, for the period Mar 2015 YTD

28 Overview Growth KRX s daily average trading value and market capitalization of ETFs have increased quickly since inception. The average daily turnover of KRX s ETFs in 2014 is approximately the same as HKEx s, but HKEx s ETF market is growing to more than twice of KRX s this year This chart shows the daily average levels of Trading Value and Market Cap Trading Value (Left, KRW billion) Market Capitalization (Right, KRW billion) Source: KRX, as of 23 July 2015

29 ETF Products Product Range KRX s ETF market offers a wide range of investment exposure. ETFs (148) Equity (107) Fixed Income (19) Inverse/ Leverage (9) Commodity (9) Market Rep. (23) Sector (33) Style (3) Theme (34) Currency (2) Foreign Stock (14) Source: KRX, as of 23 July 2015 Real Estate (2)

30 Overview Growth The largest ETFs listed on KRX are equity ETFs tracking KOSPI 200. Rank Code Name Underlying Index Provider AUM (billion KRW) 1 A KODEX 200 KOSPI 200 Samsung Asset 4, A KODEX Leverage KOSPI 200 Samsung Asset 2, A TIGER 200 KOSPI 200 Mirae Asset 1, A KODEX KRW CASH KRW Cash Index (Total Return) Samsung Asset 1, A KINDEX 200 KOSPI 200 Korea Investment A KODEX Samsung Samsung Group Samsung Asset A Power K200 KOSPI 200 Kyobo AXA A KODEX Inverse F-KOSPI 200 Samsung Asset A TIGER MONEY MARKET KIS MSB 3M(Total Return) Mirae Asset A ARIRANG 200 KOSPI 200 Hanwha Source: KRX, as of 23 July 2015

31 Part 4 Japan and Singapore ETF Market

32 Overview Rank By Asia Pacific ETF AUM By Asia Pacific ETF Turnover 46(20%) 69(18%) Source: AUM Deutsche Bank, Bloomberg, Reuters, as of 17 Apr 2015 Turnover World Federation of Exchanges, for the period Mar 2015 YTD

33 Overview As the largest ETF market in the Asia Pacific area, JPX s ETF AUM and turnover are more than 140% of HKEx s AUM and turnover. Comparing to other markets, trading volumes of ETFs on Singapore market are relatively stable these years. And its market size is even less than Taiwan market. The AUM and turnover are all less than 10% of the HK market. Monthly Volume & Turnover of SGX s ETFs Source: SGX, as of 24 July 2015

34 Features and Developments Japanese ETF market is a well developed market which includes different types of ETFs, such as leveraged and inverse ETFs, JDR structures, thematic ETFs, ETNs, REITs, bond ETFs, enhanced (risk control, covered calls etc.) Singapore regulators had changed the rule in April to made more ETFs accessible to retail investors. SGX data shows that the most actively traded ETFs include ETFs that give investors access to popular markets such as Shanghai and Mumbai In the future, the ETFs in these mature markets will probably turn to the investment in emerging markets, and more innovative ETF products may appear.

35 Contact Information Melody He, Head of Capital Markets, CSOP Asset Management Phone: Web-address:

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