First European Stoxx ETF Starts Trading in Asia

Terry Flanagan

A Euro Stoxx 50 index product has begun trading in Asia for the first time after the index provider targeted the region by opening an office in Hong Kong in 2011.

Konrad Sippel, head of the global business development at Stoxx, told Markets Media: “This is a significant step as it is the first time that a Euro Stoxx 50 Index product is trading in the Asian market.”

On April 30, Mirae Asset Global Investments, a Korean fund manager, listed an ETF based on the Euro Stoxx 50 Index on the Korea Exchange. There are currently 21 ETFs on the index globally.

Sippel said that in Asia asset allocation to non-domestic indices will grow and Stoxx wants to be in the market at the beginning of that trend.

“In general there has been a large inflow into the European theme which is seen as fairly attractively valued,” he added. “In the US they have realised this opportunity while Asia is at an earlier stage of foreign investment.”

Stoxx is marketing its existing product range in Asia such as its European indices and minimum variance indices, which are constructed to minimise volatility and drawdowns, but also developing new indices for the region.

“The minimum variance concept is fairly complex and lots of things can be done in different ways in the model,’ added Sipple. “There is a battle of the brains to find the right concepts and we are engaging in that battle.”

Last month Japan’s Nomura Asset Management licensed the Stoxx Asean-Five Select Dividend 50 Index for a product listed on the Tokyo Stock Exchange.The index includes 50 companies with high dividend payments from five five Asean member states: Indonesia, Malaysia, Philippines, Singapore and Thailand.

Stoxx has also licensed two ETFs in China which are waiting for regulatory approval to trade.

“In twelve months our aim and aspiration is to have tradeable products in more that one country in Asia. We are working hard to make that happen,” said Sippel.

Stoxx’s owner, German exchange operator Deutsche Börse, has identified Asia as a priority for growth and plans to set up a clearinghouse in Singapore.

In March this year Deutsche Börse and Bank of China agreed a strategic cooperation which will see Bank of China become a trading and clearing participant of the German exchange. The two companies will also develop financial infrastructure and support the internationalization of the renminbi by promoting Frankfurt as the European offshore centre for the Chinese currency.

Featured image via iStock

Related articles

  1. Investors are seeking the tax efficiency, trading flexibility and cost benefits of ETFs.

  2. Low Bond Yields Force Pensions’ Hand

    US Department of Labor has allowed pension plan fiduciaries to consider ESG factors.

  3. Goldman Sachs Asset Management agreed to pay a $4m penalty.

  4. FINRA membership marks further momentum in WisdomTree Securities' digital strategy.

  5. The prior administration’s restrictions on retirement plans and ESG were removed.