Asia-Pacific exchange-traded funds, products see US$780m net outflows in Sept

IN September this year, exchange-traded funds (ETFs) and exchange-traded products (ETPs) listed in Asia-Pacific (excluding Japan) saw net outflows of US$780 million.

Equity ETFs/ETPs experienced net outflows with US$1.6 billion, while fixed income ETFs/ETPs saw net inflows of US$125 million and commodity ETFs/ETPs saw net inflows of US$24 million.

These were according to data compiled by research firm ETFGI.

"Investors in Asia-Pacific are becoming more cautious due to the unfavourable geopolitical environment taking some net assets out of equity ETFs/ETPs and allocating some net new assets to government bonds and precious metals ETFs/ETPs.

"During September the S&P 500 declined one per cent, developed markets declined 4 per cent while emerging markets declined 7 per cent," said Deborah Fuhr, managing partner at ETFGI.

ETFs are open-ended, index-based funds which can be bought and sold like ordinary shares on a stock exchange and offer broad exposure across developed, emerging and frontier markets, equities, fixed income and commodities.

ETPs are similar to ETFs in the way they trade and settle, but do not use an open-end fund structure. Their use of other structures such as unsecured debt and grantor trusts, on top of a significantly different risk profile, also create different tax and regulatory implications for their investors.

As at end-September, the Asia-Pacific (excluding Japan) ETF/ETP industry had 557 ETFs/ETPs, with 690 listings, assets of US$103 billion, from 96 providers listed on 15 exchanges.

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