1nvest gives access to Asian emerging markets with new ETF fund
According to recent exchange data from Bloomberg, overseas investors bought a net $2 billion of emerging Asia stock markets in the 22 July trading week.
This includes countries such as South Korea, Taiwan, and India. Reasons cited for investors’ increased exposure in these markets include low inflation, affordable currencies, and superior growth. Global shifts such as recent oil price reductions and the US dollar have also contributed to favourable investment conditions.
In South Korea, the benchmark Kospi Index jumped 2.7% in that same week, Taiwan’s Taiex index added 2.7%, and S&P BSE Sensex in India gained more than 4% (Source: Bloomberg).
Over and above these encouraging numbers, several developing factors are also creating a positive investment outlook. General projections are that, due to the speed and evolution of central bank efforts to reduce extraordinary monetary accommodation, Asian markets are expected to take currency positions based on intra-regional pairings.
Further, more country-specific forecasts are that China’s credit growth is expected to accelerate, a key driver in GDP growth. Looking towards Indonesia, a GDP growth in the mid-4% range is projected due to continued recovery after COVID-19.
Broadening SA’s emerging market investment opportunities
For South African investors looking to optimise their existing portfolios by including emerging Asian markets and mid- and large-cap stocks, it is important to diversify into these economies with the right fund. Only by striking the ideal combination between representation in selected countries, combined with diversified exposure to equities that offer long-term returns, can investors gain access with a calculated risk strategy.
Fortunately, the new 1nvest MSCI EM Asia Index Feeder ETF (JSE code ETFEMA) offers exactly this. This feeder fund tracks the MSCI Emerging Markets Asia Index
Launching on 18 August, 2022, this new addition to 1nvest’s global ETF range provides exposure to diversified Asian countries by tracking a carefully selected index, the MSCI Emerging Markets Asia Index , giving investors cost-effective access to relevant and differentiated indices that provide compelling global returns. 1nvest, an award-winning, specialist index fund manager backed by Standard Bank, is continuously developing a wide selection of local and international unit trusts and ETFs, including commodity ETFs.
Of the new emerging markets ETF fund, Ryan Basdeo, Head of Index Portfolio Management, says, “Where other funds offer general or one-country exposure, our MSCI EM Asia Index Feeder ETF fund successfully navigates a balance between specificity and diversification. Astute fund managers understand the importance of a focused and varied portfolio to manage risk and maximise return. By honing in on new investment opportunities in broad emerging markets, investors can benefit from these countries’ elevated economic growth rates and realise higher expected returns.”
This underlying MSCI index captures representation across eight emerging countries, namely China, India, Indonesia, South Korea, Malaysia, the Philippines, Taiwan, and Thailand. With over 1 100 constituents, the underlying index covers approximately 85% of the free float-adjusted market capitalisation in each selected country.
1nvest’s series of mid-2022 successes
“As a company, we are in the process of building on a series of successful ETF launches following a very deliberate and considered process,” explains Johann Erasmus, Executive Director of 1nvest. “After the recent listing of 1nvest’s MSCI World Socially Responsible Investment Index Feeder ETF (JSE code ETFSRI), which offers South African investors diversified global equity market index exposure, this fund broadens our clients’ investment horizons even further with well-established indices in emerging Asian markets.”
What’s more is that since the 1nvest fund is a feeder fund, it will give investors the index return by investing in the iShares MSCI EM Asia UCITS ETF.
