How Did Asia Strategic-Beta ETPs Weather the Storm? (Part 1)

Strategic-beta ETP assets in the Asia-Pacific region grew at an organic growth rate of 11.9%in the in the first six months of 2020.

Jackie Choy, CFA 13 November, 2020 | 16:45
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In July, published our sixth-annual Global Guide to Strategic-Beta Exchange-Traded Products1. In the latest installment of this guide, we found that strategic-beta ETPs in the Asia-Pacific region have continued to show stronger growth in 2019 relative to more mature markets, such as the United States and Europe. In the wake of the coronavirus-driven sell-off and subsequent rebound, we will look at a fresh snapshot of the strategic-beta ETP landscape in the Asia-Pacific region. We will also examine how these products have weathered the pandemic and see what lessons investors can learn from their first-half 2020 performance.

Growth Continues but Has Been Spotty

Strategic-beta ETP assets in the Asia-Pacific region grew at an organic growth rate of 24.6% in 2019. In the in the first six months of 2020, they grew by 11.9% organically. However, growth has been spotty. Much of this recent growth was driven by China, where there have been 10 new strategic-beta ETPs listed in 2020. (Some of them launched in 2019 but had yet to report assets to our database, so they were not included in our sixth-annual guide.) These new entrants helped China-domiciled strategic-beta ETPs achieve an organic growth rate of 51.4% in the first half of 2020. Taiwan also experienced strong organic growth (64.8% in the first half of 2020), which was mostly attributable to flows into one product, Yuanta/P-Shares Taiwan Dividend Plus ETF (0056). On the other hand, the number of strategic-beta ETPs in South Korea declined to 82 from 87. Assets in South Korean strategic-beta ETPs shrank to USD 1.4 billion, as organic growth registered at negative 10.6%. Japanese strategic-beta ETPs also contributed to the overall growth of the regional market. Growth in Japan was bolstered by the Bank of Japan's ETP purchases.

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About Author

Jackie Choy, CFA  Jackie Choy, CFA is the Director of ETF Research for Morningstar Investment Management Asia

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