Exchange traded funds hit record of S$4.6 billion

Turnover of exchange-traded funds listed on the Singapore Exchange hit a record high of S$4.6 billion for 2009.

This is 56% above the record achieved in 2008, and is the third straight year in which record turnover was achieved.

90% of ETFs listed here are focused on offshore markets and other non-equity underlying instruments such as commodities. ETFs with a non-domestic focus also account for over 90% of ETF turnover on SGX, unlike most other Asian markets, where ETFs with a domestic focus tend to dominate ETF trading.

Mr Thomas Tey, Senior Vice President and Head of Product Management at SGX says that the diverse range of ETFs offered by the SGX is the likely reason for the growth in ETF turnover as investors are attracted to the funds for asset allocation and risk management. He added that retail participation in the funds has also improved considerably due to joint efforts with issuers and broker channels by in investor education, regional seminars and ETF research reports.

During the year, investors leveraged on SGX-listed ETFs to access markets that allow only limited access. The three most active ETFs by turnover were the iShares MSCI India ETF, the Lyxor ETF India (S&P CNX Nifty) and the SPDR Gold Shares ETF which together accounted for about 60% of total ETF turnover.

Six more new ETFs were also listed on SGX last week, bringing the total number of ETFs to 49 and making SGX Asia’s third-biggest market in terms of ETF listings.

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