APAC’s ETF market growth stutters in 2014

03 July 2014   Category: News, Asia, China, Global, Hong Kong, Japan, Korea   By Derek Au

Growth in Asia-Pacific’s ETF market stuttered in the first four months of the year, according to research by Cerulli Associates, amid uncertainties in the global financial environment.

A survey from the US-based research firm showed that AUM of the region’s collective ETFs remained at around the US$170 billion mark between January and April. ETF assets, however, did rise by $2.7 billion in Japan during the period, but those in mainland China, Hong Kong, and Korea shed a combined $4.9 billion.

Cerulli attributed the lackadaisical overall performance to uncertain global market conditions, as opposed to investors “losing faith” in the products themselves. “A high level of conviction is needed to hold an ETF for the longer term," said Cerulli’s Asia editor, Thusitha de Silva.

He added that some ETF providers, whose performance has been impeded by relatively low penetration in some parts of the region, needed to work on brand awareness and getting retail investors to understand their investment philosophies.

Statistics from consultant ETFGI painted a similarly gloomy picture, confirming that ETF AUM was around $169.9 billion during the same period, limping up just 0.6% compared to the same time frame in 2013.

There are indications, however, that momentum has picked up in the time since that reporting period. Figures from State Street Global Advisors, the asset manager behind the SPDR stable of ETFs, showed that AUM of these products regionally rose 3.6% month-on-month to $179 billion during May.