ETFs continue to grow in popularity across Asia, according to a new report on the Asia Pacific ETF market by BlackRock. Asian institutional investors are embracing ETFs as an asset allocation tool. Investors spoken to by BlackRock says they use ETFs mostly for making tactical adjustments, equitising cash and for transitions.
Assets under management in Asia Pacific-listed exchange traded funds have grown 7% so far in 2010, with the number of listed products tripling since 2007. Black Rock says there are now more than 250 ETFs/ETPs listed in the Asia Pacific region, with assets of $70 billion listed on 15 exchanges.
For global exposure, many investors in the region continue to trade ETFs listed in the US or Europe. A lack of mutual recognition in Asia is holding back the development of ETF funds domiciled in the region. Unlike Europe, where there is an established process to register and cross list UCITS-compliant ETFs, Asian ETFs suffer for not having a similar cross-listing procedure in place among regional exchanges. This is the same problem that holds back the development of a regional mutual funds market.
Nomura is the largest provider in Asia inc Japan, with 32 ETFs and assets of $14bn, reflecting a 20% market share. State Street Global Advisors has six products, $10bn AUM and a 14% market share. iShares has 14 products and assets of $8bn and 12% market share. The top five providers, out of 60 in Asia, have a 63% market share collectively.
To view the BlackRock Asian ETFs report, go to: http://www.blackrockinternational.com/content/groups/internationalsite/documents/literature/etfl_ap_review_aug10.pdf
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