OREANDA-NEWS. Taiwanese voters head to the polls this Saturday to elect a new government, and the opposition Democratic Progressive Party is widely anticipated to win both the presidency and the legislature for the first time in the island’s history. Opinion polls suggest voters are gravitating towards DPP Chairwoman Tsai Ing-wen, over New Taipei City Mayer Eric Chu, head of the ruling Kuomintang.

A victory by Tsai would mean she becomes the island’s first female president and a second defeat for the KMT. It could also affect cross-strait ties, which have improved since President Ma Ying-jeou of the KMT took office in 2008, as the DPP charter officially supports independence from the Mainland.

The outlook for Taiwan equities will be affected by how the DPP – if it wins the elections – manages its relations with Beijing, as well as the performance of the Chinese economy and the yuan currency. Foreign investors were net sellers of Taiwan stocks in four of five sessions over the past week, according to trading data for 8 January to 14 January from the Taiwan Stock Exchange.

SGX lists two ETFs with Taiwan exposure – Lyxor ETF MSCI Taiwan and db x-trackers MSCI Taiwan Index UCITS ETF (DR). These two ETFs averaged month-to-date and 12-month total negative returns of 7.3% and 12.0% respectively.

Month-to-Date Performances

The 10 most active ETFs on SGX in the month-to-date were SPDR® Straits Times Index ETF, iShares MSCI India Index ETF, SPDR® Gold Shares, iShares Barclays Capital USD Asia High Yield Bond Index ETF, db x-trackers CSI 300 UCITS ETF, db x-trackers MSCI China Index UCITS ETF (DR), db x-trackers MSCI Thailand Index UCITS ETF (DR), Nikko AM Singapore STI ETF, db x-trackers FTSE Vietnam UCITS ETF and db x-trackers MSCI Indonesia Index UCITS ETF.

In the month thus far, these 10 most active ETFs averaged a 4.4% decline in total return, taking the one-year and three-year annualised total returns to negative 10.8% and negative 0.4% respectively. The three best performers in terms of month-to-date total returns were SPDR® Gold Shares, db x-trackers MSCI Indonesia Index UCITS ETF and iShares Barclays Capital USD Asia High Yield Bond Index ETF.

The above-mentioned ETFs saw a 167% YoY increase in turnover for the month thus far, rising from S$48.8 million in the January 2015 month-to-date to S$81.6 million in the same period this year. This brings the total 12-month turnover to S$2.0 billion.

Although the Federal Reserve raised interest rates for the first time in nearly a decade last month, increased volatility in global investment markets, uneven global growth outlooks, and relatively low inflation levels have seen capital flows into haven assets such as gold and high-yield bonds.

The three most active ETFs over the first nine sessions of 2016 were SPDR® Straits Times Index ETF, iShares MSCI India Index ETF, SPDR® Gold Shares.

The 10 most active ETFs in the January 2016 month-to-date and two ETFs with Taiwan exposure are detailed below, and are sorted by MTD turnover.

Name Stock Code Price (S$) MTD Turnover 2016 (S$) MTD Turnover 2015 (S$) 12M Turnover (S$)

Ten Most Active ETFs in MTD
SPDR® Straits Times Index ETF ES3 2.71 28,693,272 3,696,520 424,754,637
iShares MSCI India Index ETF I98 6.39 15,948,517 10,871,129 589,443,539
SPDR® Gold Shares O87 104.43 11,579,935 19,402,605 461,776,497
iShares Barclays Capital USD Asia High Yield Bond Index ETF O9P 10.18 8,856,313 2,119,214 100,776,793
db x-trackers CSI 300 UCITS ETF KT4 8.08 4,136,962 4,975,845 93,208,862
db x-trackers MSCI China Index UCITS ETF (DR) LG9 10.94 2,811,352 412,669 87,522,446
db x-trackers MSCI Thailand Index UCITS ETF (DR) LG7 15.23 2,774,947 1,121,491 36,961,960
Nikko AM Singapore STI ETF G3B 2.71 2,478,123 1,703,804 61,844,543
db x-trackers FTSE Vietnam UCITS ETF HD9 21.88 2,204,495 1,653,872 64,481,864
db x-trackers MSCI Indonesia Index UCITS ETF KJ7 11.48 2,104,009 2,800,522 77,914,360

Taiwan ETFs
db x-trackers MSCI Taiwan Index UCITS ETF (DR) HD7 17.16 18,379 15,403,708 15,403,708
Lyxor ETF MSCI Taiwan A9A 0.92 28  19,549.68 1,635,413

Source: SGX (data as of 14 January 2016)

Name Stock Code Total Return MTD % Total Return 12M % 3 Yr Total Return Annualized % 3 Yr Total Return % 30 day Volatility %

Ten Most Active ETFs in MTD
SPDR® Straits Times Index ETF ES3 -8.4 -17.5 -3.3 -9.4 13.3
iShares MSCI India Index ETF I98 -3.1 -10.4 4.9 15.4 16.2
SPDR® Gold Shares O87 4.4 -4.0 -9.0 -24.6 14.0
iShares Barclays Capital USD Asia High Yield Bond Index ETF O9P 1.0 14.6 8.4 27.2 9.9
db x-trackers CSI 300 UCITS ETF KT4 -15.1 -13.2 6.2 19.7 46.7
db x-trackers MSCI China Index UCITS ETF (DR) LG9 -10.7 -15.8 0.2 0.5 22.3
db x-trackers MSCI Thailand Index UCITS ETF (DR) LG7 -2.6 -19.4 -5.2 -14.8 24.0
Nikko AM Singapore STI ETF G3B -8.3 -17.9 -3.3 -9.5 17.4
db x-trackers FTSE Vietnam UCITS ETF HD9 -3.0 -12.6 0.9 2.6 18.6
db x-trackers MSCI Indonesia Index UCITS ETF KJ7 1.2 -11.8 -3.7 -10.7 20.9
Average   -4.4 -10.8 -0.4 -0.4 20.3

Taiwan ETFs
db x-trackers MSCI Taiwan Index UCITS ETF (DR) HD7 -7.3 -12.5 2.9 8.8 19.0
Lyxor ETF MSCI Taiwan A9A -7.3 -11.5 2.7 8.5 17.8

Source: SGX (data as of 14 January 2016)

ETFs are investment funds listed and traded intraday on a stock exchange. The majority aim to track the performance of an index and provide access to a wide variety of markets and asset classes, including local stocks, international securities, bonds, commodities or money markets.

Each ETF gives investors access to the performance of the asset that comprises the underlying index. Investing in the ETF is also less costly if one was to build a similar portfolio by buying the individual stocks. It also provides exposure to international markets and asset classes that may be inaccessible to individual investors.