Lyxor International Asset Management, a unit of Societe Generale, will list five new exchange-traded funds (ETFs) on the Singapore Exchange (SGX) on May 12. The ETFs will cover indices that track markets outside Asia, including the US, which is a first on the SGX.
The new funds are: Lyxor ETF Eastern Europe, Lyxor ETF MSCI Emerging Markets, Lyxor ETF MSCI EM Latin America, Lyxor ETF MSCI World, and Lyxor ETF Nasdaq-100.
"The new listings will take Singapore investors a step closer to conveniently realising investment opportunities offered by the global markets while trading in the comfort and safety provided by SGX," says Joseph Ho, who looks after the Lyxor brand as head of exchange-traded funds for Asia-Pacific at Societe Generale.
"While there are still disagreements over when and in what form or shape the recovery will come, a global range of ETF products providing easy access is likely to benefit investors, large and small alike."
ETFs are traded on an exchange just like any stock. An ETF holds assets such as stocks or bonds and trades at around the same price as the net asset value of its underlying assets over the course of the trading day. Most ETFs track an index, while others are custom-made to track specific assets. ETFs aregenerally considered attractive as investments because of their low costs and stock-like features.
Ho believes that offering a diverse range of products will help deepen the ETF market in Asia.
"If you look at why ETFs have been successful elsewhere, it's because of the diversity of the products. Over in the US and Europe, ETFs are sold more as investment tools rather than a product," Ho says.
For its part, the SGX says the latest planned listings are in line with its strategy of developing the exchange as an Asian ETF hub. The listing of Lyxor's five ETFs will bring SGX's total ETF offering to 35, more than half of which are managed by Lyxor.
"Our next goal is to make SGX the Asian hub for investors to invest globally," says Andrew Ler, head of private investors at SGX.
The 35 ETFs on the SGX cover mainly Asian equity markets such as Singapore, India, Greater China, Asean, Korea and Japan as well as commodities, including gold.
Lyxor ETF Eastern Europe tracks the performance of CECE EUR Index published by the Vienna Stock Exchange. The index is made up of equities selected from the Eastern European markets of Hungary, Czech Republic and Poland. As of end-April, the CECE EUR Index had 29 stocks in the three countries with a total market capitalisation of $104.9 billion. The annual total expense ratio (TER) for this ETF is 0.50%.
Lyxor ETF MSCI Emerging Markets aims to replicate the performance of the MSCI Emerging Markets Index. As of end-April, the index had 738 stocks in 23 global emerging markets including Argentina, Brazil, Chile, China, Columbia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand, Turkey and Venezuela, with a total market capitalisation of $2.06 trillion. The annual TER for this ETF is 0.65%.
Lyxor ETF MSCI EM Latin America charts the performance of the MSCI EM Latin America Index. As of end-April, the index had124 stocks in six countries including Argentina, Brazil, Chile, Colombia, Mexico and Peru, with a total market capitalisation of $449 billion. The annual TER for this ETF is 0.65%.
Lyxor ETF MSCI World aims to replicate the performance of the MSCI World Index, offering investors an opportunity to gain instant exposure to global developed market equity performance. As of end-April, the index had 1,678 stocks across 23 developed market countries around the world with a total market capitalisation of $16.248 trillion. The annual TER for this ETF is 0.45%.
Lyxor ETF Nasdaq-100 tracks the performance of the Nasdaq-100 Index, which has the largest 100 Nasdaq-listed companies with a total market capitalisation of $1.67 trillion as of end-April. Many of these constituent companies are technology companies, thus giving the ETF a heavy technology tilt. The annual TER for this ETF is 0.30%.