Malaysian banking group CIMB has listed a dollar-denominated exchange-traded fund (ETF) focused on the Asean region. The FTSE/Asean 40 ETF listed in Singapore and claimed by CIMB to be the first of its kind, will track an index that holds the largest 40 stocks by market capitalisation from across Singapore, Malaysia, Thailand, Indonesia and the Philippines.

CIMB's selection criteria slants the ETF towards Malaysian and Sinaporean equities with 11 stocks each, followed by nine Thai stocks, seven Indonesian stocks and a single Philippine stock.

The fund's top-four holdings make up more than a quarter of the ETF, led by DBS with an 8.43% weighting, followed by United Overseas Bank and Maybank with 7.24% each, and Singapore Telecom with 6%. As with all FTSE-created indices, the Asean 40 will be rebalanced every quarter.

According to CIMBÆs group chief executive, Nazir Razak, the rationale behind launching the ETF is to provide both institutional and individual investors with instantly diversified and cost-efficient access to the Asean markets.

ôIt is an important capital markets validation of AseanÆs initiative to create an Asean asset class,ö Razak says. ôThe benchmark index provided total returns of 110.61% over the past five years and the combined GDP of the Asean-5 nations accounts for 91% of AseanÆs GDP.ö

Finance ministers from Malaysia and Singapore have backed the product calling it a significant step forward for international investors to gain access to growth in the Asean economies.

The CIMB ETF will be administered by State StreetÆs investor services operation in Singapore. It will be managed by CIMB-GK Securities and sub-managed by CIMB Principal Asset Management. Citigroup has been appointed market maker and the fund advisor is Barclays Global Investors.