Asia Pacific ETFs: Equity and bond ETFs see assets increase

2015. 11. 2 Asia Pacific ETFs Equity and bond ETFs see assets increase Risk assets perform well: Asset markets (including equity and bond markets) in the Asia Pacific region performed well in October. Stock markets across the region performed well, led by the Shanghai and Shenzhen Stock Exchanges, which advanced 10.8% and 17.3%, respectively. In developed markets (DMs), Japan’s Nikkei 225 rose 9.7%, while the Hong Kong, Singapore, and Australia indices rose 8.6%, 7.4%, and 4.5%, respectively. In emerging markets (EMs) Korea’s Kospi index climbed 3.4%, while Taiwan, Thailand, and Malaysia indices rose 4.5%, 3.4%, and 2.7%, respectively. Amid stock market advances, CDS premiums for all nations in the region dipped m-m at the end of October. Equity- and bond-type ETF assets up: Assets in both equity- and bond-type ETFs finished October up m-m. Equity ETF assets rose USD14.5b from USD221.6b to USD236.1b on stock market rallies, while assets in bond and short-term ETFs finished the month up USD10.5b as the region’s bond markets strengthened amid expectations that the US Fed will delay hiking interest rates and concerns over sustained economic slowing rose. China ETFs—funds flowing into short-term ETFs: The Chinese ETF market saw a USD8.7b increase in assets in October. Notably, while large-cap ETFs (eg, CSI300 and SS50) suffered net outflows, short-term ETFs (eg, money market funds) enjoyed significant capital inflows thanks to increased profit-taking following technical rebounds in stock markets. Shenzhen Exchange small caps faring well: Twelve ETFs listed on the Shenzhen Exchange (including small cap or CHINEXT-related ones) number among the top-30 performing ETFs in the region ytd. With lackluster performances from large caps continuing to drag on Chinese stock markets, speculative capital has flowed into smaller stocks listed on the Shenzhen Exchange. Investment strategy ahead of year-end events: We expect asset market volatility in the region to surge again toward year-end, led by an uptick in controversy over Fed rate hikes and the implementation of various fiscal measures in China. Speculative capital flowed into risky assets in October amid sustained relief rallies, but after taking profit, investors in November are likely to take a wait-and-see approach until they can confirm the outcome of major macroeconomic events towards the end of this year. Against this backdrop, we believe a sector- and style-led investment strategy will be more effective than a country-specific one. Selective stock-picking in the IT and consumer goods sectors—especially picking value stocks (vs growth ones)—should be advantageous. ETF News 2015. 11. 2 2 Asia-Pacific ETFs ETF listings Note: As of Oct 30; based on existing ETFs Source: Bloomberg, Samsung Securities ETF listings, by exchange Exchange 2006200720082009201020112012201320142015Australia 14151220101112Bangkok 11115354Hong Kong 136122082911129Indonesia 11231Korea 851518164429163685Bursa Malaysia 1121Mumbai 1Ho Chi Minh 111Nagoya 1N.S. India 632872442New Zealand 2Osaka 222612Philippines 1Shanghai 112711618112Shenzhen 261141423Singapore 2152242Taiwan 24415341Tokyo 43613187201828Total 1625825096127108102110143Note: As of Oct 30; based on existing ETFs Source: Bloomberg, Samsung Securities 761937452030465072556939574548627360010203040506070802H061H072H071H082H081H092H091H102H101H112H111H122H121H132H131H142H141H152H15(No of products) ETF News 2015. 11. 2 3 Asia-Pacific listed ETFs, by asset class Asset class AUM (USDm)Number of ETFsEquity 236,165 746Fixed Income 44,849 9Money Market 11,281 68Commodity 4,979 80Specialty 1,417 49n/a 426 3Mixed Allocation 128 8Total 299,244 963Note: As of Oct 30 Source: Bloomberg, Samsung Securities AUM of ETFs, by exchange and asset class (USDm) CommodityEquityFixed IncomeSpecialtyMixed AllocationMoney MarketTotalASE 399 6,883 1,275 359 8,915 Bangkok 36 100 136 BSE India 66 66 Hanoi 4 4 Ho Chi Minh 17 17 Hong Kong 113 35,157 3,718 62 39,051 Indonesia 122 122 Korea 294 13,963 4,094 848 88 19,287 Malaysia 82 223 305 N.S. India 951 1,157 142 2,250 Nagoya 37 37 New Zealand 383 383 Philippines 30 30 Shanghai 73 19,595 1,122 43,621 64,411 Shenzhen 176 7,067 34 1,228 8,505 Singapore 1,133 15,403 615 17,151 Taiwan 77 6,151 40 6,268 Tokyo 1,728 129,948 58 148 132,308 Total 4,979 236,165 11,281 1,417 128 44,849 299,244 ETF News 2015. 11. 2 4 AUM of listed ETFs, by exchange Primary exchange TotalAveragePrevious month-end (USDm) (USDm)(USDm)Tokyo 132,308 752 122,175 Shanghai 64,411 859 56,255 Hong Kong 39,051 365 35,826 Korea 19,287 99 17,117 Singapore 17,151 429 15,564 Shenzhen 8,915 93 8,336 Australia 8,505 185 9,997 Taiwan 6,268 202 5,531 N.S. India 2,250 48 2,008 New Zealand 383 38 355 Bursa Malaysia 305 44 239 Bangkok 136 6