Germany's Deutsche Bank on Wednesday said it was embarking on a major build-up for its exchange-traded funds in Asia, as it expects the region's ETF sector to grow 20 percent annually in coming years. Deutsche Bank was aiming to launch 16 more ETFs across asset classes in Hong Kong, adding to the six equity-linked ETFs it unveiled in Chinese territory since the end of June, Thorston Michalik, global head of ETFs, told Reuters in an interview.
He added that Deutsche Bank, which has ETFs in Hong Kong and Singapore, planned to enter two more Asian markets, targeting 30 exchange-traded products throughout the region within the next 12 months, about triple the current number. He declined to name specific new markets.
The company is making the expansion as it expects the size of Asia's ETF market, which had about $55 billion in assets under management as of the end of June, to grow by $10 billion-$11 billion each year over the next few years. The MSCI Asia-Pacific Index slid 42 percent in the eighteen months from its October 2007 peak, while assets under management in ETFs outperformed, limiting losses to 18 percent in same period, said Syed. Deutsche Bank, which made its Asian debut with five ETF products in Singapore in April, has between $100 million and $200 million in assets under management in Asia, but the company aims be among the top three issuers in the region going forward.
There are 180 equity-based ETFs in Asia-Pacific across 12 countries and 15 exchanges with Japan assuming pole position in terms of assets under management, while China, including Hong Kong-listed ETFs invested in Chinese equities, leads the pack in terms of turnover with a 42.6 percent market share, according to Deutsche Bank research.
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