Asia Ex-Japan Equity Swings Dominate Recent ETF Activity
OREANDA-NEWS. Asia ex-Japan stocks snapped a four-day win streak on Thursday, as crude extended its decline below US$40 a barrel after a larger-than-expected jump in American stockpiles, and the US dollar continued its rally against major currencies for a fifth day.
Shares in emerging markets, including Thailand, Malaysia and Indonesia, headed for their first weekly loss in a month, after entering a bull market last week. The Federal Reserve’s decision on 17 March to hold interest rates and halve its projection for rate hikes this year to two had spurred a global stock rally and a retreat in the US dollar.
Terror attacks in Brussels, the resurgent greenback, and hawkish comments by several Fed officials earlier this week have weighed on sentiment, sparking a pullback in regional markets.
Federal Reserve Bank of St Louis President James Bullard joined his San Francisco and Atlanta counterparts this week in signalling that US interest rates could be raised as soon as their 26-27 April meeting if economic data continued to improve.
Fed fund futures show traders have put the chances of an April hike at 8%, according to data tracked by Bloomberg. The odds of a single 25-basis-point increase by December rose to 72% from 68% a week ago.
Meanwhile, Chinese stocks remain volatile. Earlier this week, an index tracking small-cap companies advanced 20% from a February low, marking its entry into bull-market territory, while the Shanghai Composite Index closed above the 3,000 level twice, after domestic economic data showed signs of stabilising.
On Thursday, Chinese equities reversed gains, slumping most in two weeks, after declining commodity prices and the slowing economy crimped earnings at some of the country’s largest companies.
Reflecting the focus on regional markets, the db x-trackers MSCI AC Asia Ex Japan Index UCITS ETF was the most active Exchange Traded Fund in the month-to-date, with MTD turnover rising nearly five-fold year-over-year to S$59.7 million.
The five largest constituents in the db x-trackers MSCI AC Asia Ex Japan Index UCITS ETF by value (market capitalisation and index weighting) are: Samsung Electronics, Taiwan Semiconductor Manufacturing, Tencent, China Mobile and AIA Group.
The MSCI AC Asia Ex-Japan Index has gained 10.2% in the month-to-date and 0.4% in the year-to-date in US dollar terms.
Month-to-Date Performances
The 10 most active ETFs on SGX in the month-to-date are db x-trackers MSCI AC Asia Ex Japan Index UCITS ETF, SPDR® Gold Shares, iShares MSCI India Index ETF, SPDR® Straits Times Index ETF, db x-trackers MSCI Japan UCITS Index (DR), db x-trackers MSCI Indonesia Index UCITS ETF, iShares J.P. Morgan USD Asia Credit Bond Index ETF, db x-trackers Markit iBoxx ABF Korea Government UCITS ETF, db x-trackers MSCI Brazil Index UCITS ETF (DR)and db x-trackers MSCI Thailand Index UCITS ETF (DR).
In the month thus far, these 10 most active ETFs averaged a total return of 6.0%, taking the one-year and three-year total returns to -8.2 % and 3.1% respectively. The three best performers in terms of month-to-date total returns were db x-trackers MSCI Brazil Index UCITS ETF (DR), iShares MSCI India Index ETF and SPDR® Straits Times Index ETF.
The above-mentioned ETFs saw a 6% YoY increase in turnover for the month thus far, increasing from S$204.7 million in the March 2015 month-to-date to S$216.8 million in the same period this year. This brings the total 12-month turnover to S$2.0 billion.
The three most active ETFs over the first 17 sessions of March were db x-trackers MSCI AC Asia Ex Japan Index UCITS ETF, SPDR® Gold Shares and iShares MSCI India Index ETF.
The 10 most active ETFs in the March 2016 month-to-date are detailed below in Singapore dollars and sorted by MTD turnover.
Name | Stock Code | Price (S$) | MTD Turnover 2016 (S$) | MTD Turnover 2015 (S$) | YTD Turnover 2016 (S$) | 12M Turnover (S$) |
db x-trackers MSCI AC Asia Ex Japan Index UCITS ETF | IH1 | 31.96 | 59,700,177 | 12,742,148 | 72,617,264 | 252,755,044 |
SPDR® Gold Shares | O87 | 118.13 | 48,651,352 | 31,256,141 | 179,952,662 | 537,872,931 |
iShares MSCI India Index ETF | I98 | 6.58 | 39,856,227 | 24,215,323 | 108,965,987 | 547,028,948 |
SPDR® Straits Times Index ETF | ES3 | 2.89 | 21,553,130 | 121,480,628 | 112,795,115 | 371,538,205 |
db x-trackers MSCI Japan UCITS Index (DR) | LF2 | 46.14 | 12,249,239 | 164,414 | 13,775,558 | 15,147,760 |
db x-trackers MSCI Indonesia Index UCITS ETF | KJ7 | 12.95 | 9,921,712 | 4,476,681 | 21,333,684 | 81,970,048 |
iShares J.P. Morgan USD Asia Credit Bond Index ETF | N6M | 10.49 | 8,587,737 | 6,375,457 | 21,406,629 | 87,274,288 |
db x-trackers Markit iBoxx ABF Korea Government UCITS ETF | KT2 | 154.06 | 7,531,619 | N/A | 7,531,619 | 15,182,723 |
db x-trackers MSCI Brazil Index UCITS ETF (DR) | J0O | 2.93 | 4,451,398 | 248,523 | 8,551,112 | 20,095,845 |
db x-trackers MSCI Thailand Index UCITS ETF (DR) | LG7 | 18.19 | 4,295,137 | 3,748,315 | 15,171,143 | 43,184,401 |
Source: SGX (data as of 23 March 2016)
Name | Stock Code | Total Return MTD % | Total Return YTD % | Total Return 12M % | Total Return Annualized 3 Yrs % | Total Return 3 Yrs % | 30 Day Volatility % |
db x-trackers MSCI AC Asia Ex Japan Index UCITS ETF | IH1 | 6.8 | -3.2 | -13.5 | 2.4 | 7.3 | 15.6 |
SPDR® Gold Shares | O87 | -2.8 | 11.9 | 4.0 | -6.1 | -17.2 | 19.4 |
iShares MSCI India Index ETF | I98 | 8.2 | -5.4 | -17.5 | 5.8 | 18.3 | 19.6 |
SPDR® Straits Times Index ETF | ES3 | 7.4 | -0.5 | -12.6 | -1.3 | -3.9 | 19.5 |
db x-trackers MSCI Japan UCITS Index (DR) | LF2 | 2.5 | -8.9 | -9.5 | 7.0 | 22.6 | 25.1 |
db x-trackers MSCI Indonesia Index UCITS ETF | KJ7 | 1.5 | 8.2 | -10.9 | -5.2 | -15.0 | 20.4 |
iShares J.P. Morgan USD Asia Credit Bond Index ETF | N6M | -1.6 | -0.4 | 2.0 | 6.6 | 21.1 | 10.8 |
db x-trackers Markit iBoxx ABF Korea Government UCITS ETF | KT2 | 3.3 | -0.4 | -0.1 | N/A | N/A | 10.6 |
db x-trackers MSCI Brazil Index UCITS ETF (DR) | J0O | 30.4 | 27.1 | -10.7 | N/A | N/A | 50.7 |
db x-trackers MSCI Thailand Index UCITS ETF (DR) | LG7 | 4.6 | 10.3 | -13.3 | -2.8 | -8.3 | 15.9 |
Average | 6.0 | 3.9 | -8.2 | 0.8 | 3.1 | 20.8 |
Source: SGX (data as of 23 March 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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