Taipei--International investors are being encouraged by investment specialists to buy into exchange traded funds (ETFs) as an optimal channel to invest in the global market.
Speaking at a recent investment conference held by the Taiwan Stock Exchange (TWSE) in Hong Kong, Antoine de Saint Vaulry, head of ETF and Flow Trading Asia at Commerzbank AG, said that since ETFs listed in Taiwan track a wide range of financial products in a number of countries, parking funds in Taiwan's ETFs means investing worldwide.
According to the TWSE, ETFs traded in Taiwan have expanded from funds tracking financial products issued in Taiwan to track those in several foreign markets, including Hong Kong, India, China, Japan, Europe, the United States and South Korea.
In addition to ETFs tracking securities in the spot and future markets at home and abroad, the TWSE also has ETFs that track bonds, foreign currencies as well as commodities such as oil and gold.
ETFs accounted for about 9 percent of the TWSE's total turnover in 2016, up from 1 percent in 2013 and the number of ETFs listed on the exchange has risen from 36 at the end of 2015 to 62 at the end of 2016 and 65 as of the end of January, according to TWSE figures.
Chang Yung-chuan (???), president of Cathay Securities Investment Trust Co. (????), said that Taiwan's ETFs include leveraged ones which can double profit in a booming market. Inverse ETFs are also traded in Taiwan, Chang said, which help investors hedge risks in a down market.
Chang said that a diverse ETF product line in Taiwan provides investors with excellent investment opportunities to rake in profits.
Citing data, Chang said that the compound annual growth rate of total assets in Taiwan's ETFs has been 20.55 percent over the past 10 years, adding ETFs are highly liquid and serve as a good vehicle for investors to cash in.
Chang said he expects ETF issuers in Taiwan to introduce products that generate stable earnings and other products that employ the "smart beta" concept to consider as many risk factors as possible. Paul Sandhu, head of Investment Solutions of Conning Asia Pacific Ltd. and Hsu Chia-jung (???), vice president of Fuh Hwa Securities Investment Trust Co. (????), also praised the diversification of ETFs listed in Taiwan, saying the Taiwan market provides investors with comprehensive investment solutions.
Liao Chung-wen (???), director of Fubon Asset Management's quantitative and index investment division, said a broader ETF product line in Taiwan will help investors deal with volatility in global financial markets.
Source: Focus Taiwan News Channel