- The Asia Pacific (ex-Japan) ETF industry has surpassed US$123 billion and experienced record net inflows of US$11 billion in the first half of 2016
- Growing use of smart beta and fixed income ETFs
HONG KONG, CHINA, Aug. 15 (Korea Bizwire) – BMO Global Asset Management (BMO GAM) has released its semi-annual ETF Outlook Report, which highlights key trends that impacted the Exchange Traded Fund (ETF) industry in the first half of 2016 along with expectations moving forward.
According to the report, the Asia Pacific (ex-Japan) ETF industry continues to grow with record-level net inflows of US$11 billion during the first half of 2016 and total assets under management of US$123 billion. The region’s AUM compares to US$2.3 trillion in AUM for the U.S. market and US$529 billion in AUM for the European market.
“In light of ongoing volatility in Asian markets and moderating growth in China since the beginning of this year, investors in the region are looking for stable, high quality products that have strong long-term prospects,” said Clarence Chan, Head of ETF & Beta Investments, BMO Global Asset Management (Asia) Limited.
“In particular, fixed income ETFs have achieved record level net inflows of US$2.6 billion, demonstrating that investors recognize the diversification and liquidity benefits of this asset class. Also, in the low yield environment, low fees of these products help investors maintain their net income.”
2016 Trends and Growth Opportunities
The BMO ETF Outlook Report also examines how global market uncertainty will drive growth opportunities for the ETF industry in the second half of 2016.
Market Volatility and ETFs: Investors continue to recognize the benefits of using ETFs to address volatility and are moving to smart beta ETFs focused on income, quality and low volatility.
Sector-Specific ETFs: Investors are migrating away from direct-security holdings to sector-based ETFs that offer diversified exposures.
Fixed Income ETFs: The growth of fixed income ETFs is expected to outpace equity ETFs as investors look for yield solutions. The ETF industry has added more precise exposures, slicing the credit spectrum and segmenting by maturity.
Currency Exposure: In an environment of global economic uncertainty, currency exposure continues to be top of mind for investors. The ETF industry has evolved and offers both hedged and unhedged exposures, giving investors effective tools to manage currency risk in their portfolios.
Capturing Yield: In the current low-interest-rate environment, investors are looking beyond traditional exposures and are gravitating towards ETFs that can generate more income for their portfolios.
The BMO ETF Outlook Report also featured expectations for the future of the ETF industry, noting that the number of providers has continued to expand globally. In response, providers are focusing on creating products that stand out in the marketplace, allowing investors to benefit from having more choice than ever before.
Mr. Chan added, “In Asia, we anticipate the ETF market will continue to mature and grow as both retail and institutional investors become more knowledgeable about ETFs and the range of offerings expands.”
To view the full report or for more information about ETFs, please visit: www.bmo.hk/etfs.
About BMO Global Asset Management
BMO Global Asset Management is a global investment manager with offices in more than 25 cities in 15 countries, delivering service excellence to clients across five continents.
Our four major investment centers in Toronto, Chicago, London and Hong Kong are complemented by a network of world-class boutique managers strategically located across the globe: BMO Real Estate Partners, LGM Investments, Monegy, Inc., Pyrford International Ltd., and Taplin, Canida & Habacht, LLC. BMO Global Asset Management is a signatory of the United Nations-supported Principles for Responsible Investment initiative (UNPRI).
BMO Global Asset Management is a part of BMO Financial Group, a highly diversified financial services provider based in North America with total assets of CDN $681 billion as of April 30, 2016, and over 45,000 employees. BMO Wealth Management has worldwide assets under management of CDN $377 billion (USD $300 billion).
DISCLAIMER: Exchange traded funds (ETFs) may not be suitable for all investors and investors should not invest based on this document alone. Before investing, investors should read the BMO ETF prospectus (available at www.bmo.hk/etfs) for further details, including product features and risk factors. Investment involves risks. The value of investments and the income from them can go down as well as up, and investors may not get back the original amount invested. Nothing in this document is, or is intended to be, an offer, advice, or a solicitation to buy or sell any investments. This document is issued by BMO Global Asset Management (Asia) Limited and has not been reviewed by the SFC.
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Source: BMO Global Asset Management via Marketwired