3 Nifty Based ETFs Launched On Taiwan Stock Exchange

Business

oi-Sunil

By Sunil Fernandes

Published: Tuesday, March 29, 2016, 8:55 [IST]

Taiwan's first-ever ETFs tracking the burgeoning Indian market debuted on the Taiwan Stock Exchange (TWSE) on 29 March 2016, providing investors with more strategic options to hedge risk and to enrich their investment portfolio.

The three ETFs - the Fubon NIFTY ETF (00652), Fubon NIFTY 2X Leveraged Index ETF (00653L) and Fubon NIFTY -1 Inverse Index ETF (00654R) - were issued by Fubon Asset Management and track the Nifty 50 Index, Nifty PR 2X Leverage Index and Nifty PR 1X Inverse Index respectively.

The three indices were created of and maintained by India Index Services and Products (IISL), a National Stock Exchange of India (NSE) group company, that provides a variety of indices and index related services for the capital markets.

Mr. Sush-Der Lee, Chairman of TWSE, said, "TWSE has been actively developing Taiwan's ETF market over the past few years, with the number of ETFs listed on TWSE now reaching forty, with total assets under management of more than US$6.8 billion.

In 2015, the total trading value of Taiwan's ETF market reached a record US$51.4 billion. The introduction of the Fubon Nifty ETFs is consistent with the Financial Supervisory Commission's (FSC) promotion of the Financial Import Substitution program and will boost the growth of Taiwan's ETF market.

We hope that the launch of these new products will help us rapidly expand our connections with more overseas markets in order to increase the competitiveness of our capital market. With the support of the relevant authorities, we are also committed to deepening the cooperation between Taiwan and India, as well as other markets, to provide more diversified products for investors."

Mr. Gang Shyy, Chairman of Fubon Asset Management, said, "India is rising strongly with a positive combination of being in the right time and place, with the right people. It is the third largest market in Asia in terms of market value and trading volume after Greater China and Japan.

Although there are structural problems in India, it is emerging as an important market for risk diversification in terms of investment from Greater China. The India Index ETFs launched by Fubon Asset Management can not only help investors diversify portfolio risks, but also provide them with a comprehensive trading tool through leveraged and inverse ETFs."

Mr. Mukesh Agarwal, CEO of IISL, said, "Currently India is one of the fastest growing economies in the world and the listing of Nifty 50 based ETFs in Taiwan will ensure that investors in Taiwan can participate in the India growth story. Nifty 50 is the benchmark index of India. It is a well diversified 50 stock index representing 13 sectors of the economy covering 65% free float market capitalization of the stocks listed on NSE. Nifty 50 is the most widely used ETF benchmark in Indian domestic market with 13 ETFs tracking the index. In terms of contracts traded, Nifty 50 options traded on NSE is ranked number 1 globally and Nifty 50 futures is ranked 7th globally."

The listing of the Nifty ETFs further expands the range of ETFs tracking overseas securities that are currently available on TWSE. This includes products tracking the Mainland China, Hong Kong, Japan and the U.S. securities markets. The new products will also provide Taiwan investors with a more cost-efficient way to access the Indian market, as well as to further popularize Taiwan's ETF market globally.

According to the Securities Investment Trust & Consulting Association (SITCA), Taiwan investors invested around US$20.2 billion in single-country offshore funds as of the end of 2015. This included US$1.5 billion in India funds, compared to US$15.1 billion in U.S. funds and US$1.7 billion in Japan funds.

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