In a strategic partnership, Lion Global Investors (LGI) and China Merchants Fund Management (CMF) have launched the Lion-China Merchants Emerging Asia Select Index ETF. This marks the first exchange-traded fund (ETF) focused on emerging Asian economies to be traded in Singapore dollars. The ETF is set to list on the Singapore Exchange S68 (SGX) on Dec 11, 2024, under the code EAA.
The Initial Offering Period (IOP) of the Lion-China Merchants Emerging Asia Select Index ETF is from Nov 25 to Dec 6, 2024. The issue price of each unit during the IOP is $1.30 (or the approximate equivalent of US$1). Applications can be made via OCBC digital platforms and participating dealers like iFAST and Tiger Brokers.
The fund is designed to mirror the performance of the iEdge Emerging Asia Select 50 Index, which tracks the 50 largest and most tradable companies in India, Indonesia, Malaysia and Thailand.
Emerging Asia presents a robust growth narrative. India is poised for a 6.8% GDP expansion in 2024, while Indonesia contributes 40% to Asean's GDP. Thailand anticipates a tourism rebound, targeting 41.6 million arrivals by 2025, and Malaysia has sustained strong trade performance. These dynamics have bolstered the ETF’s appeal, particularly to investors seeking exposure to high-growth markets and industries like finance (39.5%), technology (14.2%) and energy (10.8%). The three markets represents the top three sectors invested in.
The Lion-China Merchants Emerging Asia Select Index ETF counts index constituents such as Indonesia’s Bank Central Asia and India’s HDFC Bank and Thailand’s PTT PCL, among its top constituents (as of Oct 31, 2024), with larger allocations to sectors like finance, technology and energy. The ETF may appeal to investors who are looking to gain access into these growing markets or sectors within India, Malaysia, Indonesia and Thailand.
The country breakdown for the ETF is 33.5% India, 21.8% Indonesia, 16.2% Thailand, 14.6% USA and 13.9% Malaysia, as at Oct 31.
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Kwok Keng Han, LGI’s chief marketing officer, says: “While developed markets often take the Asian spotlight, we are now seeing notable focus on emerging Asia markets and are committed to providing an easier channel for clients to access these markets. The encouraging adoption we see from investors across our range of ETF offerings in the past year underlies the belief that investors see value in cost-efficient, well-designed strategies that combine the best elements of indexing with the potential to achieve better outcomes for well-diversified portfolios.”
Dr Xu Yong, general manager, China Merchants Fund Management adds, “China Merchants Fund Management is pleased to partner with Lion Global Investors, one of Singapore’s leading asset management companies, to provide innovative solutions and offerings to expand investor access to more markets. Through this collaboration, we will be able to offer a new allocation tool for domestic investors, providing scalable solutions and thereby enhancing our service to investors.”
As part of its involvement in the SGX-SSE ETF Product Link, China Merchants Fund Management will reciprocate with the listing of a feeder ETF for the Lion-China Merchants Emerging Asia Select Index ETF on the Shanghai Stock Exchange by March 2025.
