Yuanta to launch Taiwan’s first commodity futures ETF

29 July 2014   Category: News, Asia, Global, Taiwan   By Hui Ching-hoo

Yuanta Securities Investment Trust Company (Yuanta SITC) is reportedly poised to launch the first commodity futures ETF in Taiwan as early as the fourth quarter this year, according to a report from Commercial Times.

The move comes after the island’s financial regulator amended the ‘Regulations Governing Futures Trust Funds’, which loosens investment constraints for index equities futures trust funds.

Yuanta SITC’s president and chief executive officer, Julian Liu, previously told Asia Asset Management that the revised regulations will help to promote differentiation of Taiwan’s ETF products, in terms of pushing ahead with the development of commodity futures and inverse ETFs.  

Despite Yuanta being the first mover in terms of commodity futures ETFs in Taiwan, Mr. Liu admitted that the firm does not have absolute advantage in the exotic ETF space, as the products are relatively new to many local investors.    

Yuanta SITC has chalked up as much as a 90% share in Taiwan’s ETF market, but rivals such as Fubon SITC are looking to break the former’s dominance. In particular, the Taiwan Stock Exchange (TSE) is striving to facilitate alternative ETFs in a bid to boost turnover from its current 1% to 5% of total trading volume over the coming years.

According to a report from Deutsche Bank, there were a total of 18 ETFs with 21 listings in Taiwan as of June 25, with total AUM of US$6.42 billion.