The Asia-Pacific (APAC) region is now firmly fixated on the minds of global asset managers as a target market and for good reason. Out of the region’s unprecedented economic boom has emerged an upwardly mobile and dynamic urban middle class. In China alone, nearly 400 million people are defined as being middle class, while investable assets in the country are projected to reach USD 31.8 trillion by 2021. Throughout APAC, there is also a flourishing HNWI (high-net-worth-individual) population more substantial than North America, worth around USD 21.6 trillion.
Assets invested in APAC domiciled ETFs have experienced strong growth over the last three years. New types of ETF products are finding favor across APAC too. Fixed-income ETFs having accumulated sizeable investor inflows globally are now becoming increasingly popular in the region due to their liquidity, transparency and risk diversification.
A growing number of European UCITS ETF issuers are increasingly looking to tap into the burgeoning APAC investor market, especially in jurisdictions where other UCITS products are already purchased widely by local allocators. A number of major markets including Hong Kong do not have a fee-based distribution model, so distributors who are often retail or private banks have limited incentive to sell ETFs to clients.
Key Market Trends
ETFs in APAC region
Assets under management (AUM) in APAC ETFs stood at USD 589 billion in June 2019, having more than doubled in size from December 2015 when industry-wide AUM was at USD 249 billion. Of this, the majority of the region’s assets (USD 352 billion) reside in ETFs domiciled in Japan, fuelled by the massive ETF purchase program by the country’s Central Bank.
Taiwan’s fixed income ETF market has amassed more than USD 16 billion, overtaking South Korea on an AuM basis. Taiwan’s fixed income ETF market, which tracks mostly US Treasuries and China policy financial debt, emerged more by regulatory quirk than design.
Fund Flow to ETFs in APAC compared to other regions
Despite the impressive AuM growth, APAC ETFs still only account for 10.7% of the global USD 5.49 trillion in ETF assets. A large percentage of the world’s ETFs are located in APAC. Of the 6,736 ETFs listed worldwide, 1,466 (21.8 %) are domiciled in APAC owing to the fragmented nature of the region’s markets and their relative development, at least when benchmarked against the US.
Competitive Landscape
The report includes an overview of ETF operating companies across the region. We wish to present detailed profiling of a few major companies which cover product offerings, regulations governing them, their headquarters, and financial performance. Currently, some of the major players dominating the market are listed below.
Additional Benefits:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
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Table of Contents
Methodology
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