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Monday, July 13, 2009

Deutsche Bank (DB) brings ETFs to Hong Kong

After listing four exchange-traded funds in Singapore earlier this year, Deutsche Bank listed six ETFs on the Hong Kong Stock Exchange. The ETFs are branded as db x-trackers, and they offer investors a range of underlying assets. Thorsten Michalik, global head of Deutsche Bank's db x-trackers, said he expects to list 20 or more ETFs in Asia.

The six ETFs in Hong Kong offer investors a variety of underlying assets cutting across varying markets and indices. They are the MSCI USA Total Return Net (TRN) Index ETF, FTSE/Xinhua China 25 ETF, S&P CNX Nifty ETF, MSCI Korea TRN ETF, MSCI Taiwan TRN Index ETF, and FTSE Vietnam ETF.

In Singapore, the db x-trackers include the S&P 500 Short ETF, which is Asia's first "inverse" ETF. This tracks the S&P500 Index, but in the opposite direction. Investors who expect the S&P500 Index to fall can buy this ETF, as it is based on the short index which will rise when the main index falls. The other ETFs are the MSCI Taiwan TRN Index ETF, the FTSE/Xinhua China 25 ETF, and the S&P CNX Nifty ETF.

ETFs are traded on an exchange just like a stock. An ETF holds assets such as stocks or bonds and trades at around the same price as the net asset value of its underlying assets over the course of the trading day. Some ETFs track an index, while others are custom-made to track specific assets. Investors usually like ETFs for their low costs and stock-like features -- cheap, liquid beta -- although in Asia, their uses as sophisticated portfolio construction tools have yet to catch on.

Disclosure None, Inc.

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