SGX: Gold, Indonesian Equities Dominate Recent ETF Activity
OREANDA-NEWS. Amidst continued market turbulence and rising risk aversion, haven assets like gold has been in focus. Indonesian stocks have also grabbed the spotlight on the back of improving domestic economic fundamentals.
In terms of turnover, SPDR® Gold Shares was the most active Exchange Traded Fund (ETF) in the February month-to-date and 2016 year-to-date, while db x-trackers MSCI Indonesia Index UCITS ETF was ranked the eighth most active in the MTD. Month-to-date turnover in the gold ETF was up more than five-fold year-over-year, rising to S$40.5 million in the 2016 MTD, versus S$7.67 million in the 2015 MTD.
In terms of performance, db x-trackers MSCI Indonesia Index UCITS ETF and SPDR® Gold Shares ETF have posted the highest total returns in MTD and the YTD. In the MTD, db x-trackers MSCI Indonesia Index UCITS ETF and SPDR® Gold Shares ETF chalked up total returns of 3.75% and 5.95% respectively. In the YTD, they registered total returns of 7.71% and 12.4% respectively.
Investors flocked to gold as recent market turbulence highlighted the metal’s attractiveness as a haven asset. The price of bullion for immediate delivery jumped to its highest in a year, buoyed by market volatility, worries over China’s protracted slowdown, and after Federal Reserve Chair Janet Yellen suggested on Thursday the central bank may delay further interest rate hikes.
Gold is the best-performing commodity this year, with a price gain of 19%, near bull-market territory.
Meanwhile, Indonesian stocks have rallied on a relatively upbeat outlook for Southeast Asia’s largest economy and expectations of further monetary stimulus. Indonesia’s gross domestic product grew 5.04% in the last quarter of 2015, exceeding economists’ expectations.
The central bank also cut interest rates in January for the first time in 11 months, and has signalled that further cuts may be on the cards. The government, which has taken steps to boost infrastructure spending and attract foreign investment, is targeting 5.3% GDP growth this year.
Given improving domestic fundamentals, the Jakarta Composite Index is Asia’s best-performing stock index so far this year, with a 6.2% gain in US dollar terms. This compares with a 2.9% gain for the Stock Exchange of Thailand Index since the start of the year, a 8.8% decline for the Nikkei 225 Average, 12.3% slide in the Hang Seng Index and 23.6% fall in the Shanghai Composite Index, also in in US dollar terms.
Month-to-Date Performances
The 10 most active ETFs on SGX in the month-to-date are SPDR® Gold Shares, SPDR® Straits Times Index ETF, iShares MSCI India Index ETF, db x-trackers FTSE China 50 UCITS ETF (DR), db x-trackers MSCI Thailand Index UCITS ETF (DR), db x-trackers MSCI China Index UCITS ETF (DR), db x-trackers MSCI Korea UCITS Index ETF (DR), db x-trackers MSCI Indonesia Index UCITS ETF, Lyxor ETF MSCI AC Asia-Pacific Ex Japan and db x-trackers MSCI Taiwan Index UCITS ETF (DR).
In the month thus far, these 10 most active ETFs averaged a 3.9% decline in total return, taking the year-to-date and five-year total returns to -7.8 % and -2.4% 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 SPDR® Straits Times Index ETF.
The above-mentioned ETFs saw a 82% YoY increase in turnover for the month thus far, rising from S$44.2 million in the February 2015 month-to-date to S$80.5 million in the same period this year. This brings the total 12-month turnover to S$1.8 billion.
The three most active ETFs over the first seven sessions of February were SPDR® Gold Shares, SPDR® Straits Times Index ETF and iShares MSCI India Index ETF.
The 10 most active ETFs in the February 2016 month-to-date are detailed below and sorted by MTD turnover.
Name | Stock Code | MTD Turnover 2016 (S$) | MTD Turnover 2015 (S$) | YTD Turnover 2016 (S$) | 12M Turnover (S$) | Total Return MTD % | Total Return YTD % | Total Return 5 Year % |
SPDR® Gold Shares | O87 | 40,479,582 | 7,668,456 | 80,170,302 | 481,848,198 | 5.9 | 12.4 | -5.3 |
SPDR® Straits Times Index ETF | ES3 | 13,654,179 | 3,451,657 | 78,223,529 | 462,852,111 | -2.3 | -11.8 | -5.5 |
iShares MSCI India Index ETF | I98 | 7,179,100 | 25,163,238 | 57,202,053 | 548,350,371 | -9.6 | -13.0 | -5.6 |
db x-trackers FTSE China 50 UCITS ETF (DR) | HD8 | 5,280,758 | 863,209 | 10,310,075 | 90,513,685 | -8.8 | -21.2 | -14.3 |
db x-trackers MSCI Thailand Index UCITS ETF (DR) | LG7 | 3,764,188 | 1,017,346 | 9,220,037 | 41,604,904 | -2.6 | -0.7 | 22.4 |
db x-trackers MSCI China Index UCITS ETF (DR) | LG9 | 3,256,319 | 913,801 | 9,389,973 | 92,078,578 | -9.3 | -21.2 | -8.1 |
db x-trackers MSCI Korea UCITS Index ETF (DR) | IH2 | 2,427,033 | 2,300 | 3,669,437 | 20,067,669 | -5.5 | -9.6 | -10.7 |
db x-trackers MSCI Indonesia Index UCITS ETF | KJ7 | 1,793,869 | 2,348,790 | 6,160,051 | 73,299,050 | 3.8 | 7.7 | 8.8 |
Lyxor ETF MSCI AC Asia-Pacific Ex Japan | P60 | 1,407,357 | 2,738,078 | 2,219,955 | 12,595,300 | -6.2 | -12.3 | -4.8 |
db x-trackers MSCI Taiwan Index UCITS ETF (DR) | HD7 | 1,293,927 | 19,634 | 1,341,035 | 16,706,730 | -4.7 | -7.8 | -1.1 |
Average | -3.9 | -7.8 | -2.4 |
Source: SGX (data as of 11 February 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.
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