Leading the ETF inflows in September, the AUM of the iShares USD Asia High Yield Bond ETF surpassed S$1.0 billion last week with as much as S$855 million of inflows in 3Q21. The Fixed Income ETF focuses on the performance of more than 300 high yielding corporate bonds, listed across Asia Ex-Japan, with the majority of the bonds currently maintaining yields between 1% and 8%.
According to iShares, the Asia Credit market spans over ~680 distinct issuers and a market value of ~US$1 trillion. The High Yield segment of the Asia Ex-Japan Corporate Bond that is denominated in USD maintains a market value of ~US$300 billion, with approximately half that value contributed by high yield corporate bonds issued in China. This forms the basis of the Barclays Asia USD High Yield Diversified Credit Index which is the underlying Index for the iShares USD Asia High Yield Bond ETF.
Since 30 June, the iShares USD Asia High Yield Bond ETF has declined 8.7% in USD terms, while the iShares iBoxx High Yield Corporate Bond ETF, with its global focus, declined 1.1%. While the performance differential is ~7%, with the 90-day volatility of the iShares USD Asia High Yield Bond ETF also at 7%, the price ratio between the two ETFs has recently traded at historical lows. On 4 Oct, the price ratio spread of the iShares USD Asia High Yield Bond ETF (US$9.26) to the iShares iBoxx High Yield Corporate Bond ETF (US$87.10), made a fresh all-time low of 0.1063. On a shorter-term basis, at 0.1063, the price ratio spread is also trading at more than two standard deviations below the 6-month mean (0.1067), with the current 6-month mean at 0.1147. The relative pricing of the iShares USD Asia High Yield Bond ETF to its global-facing peer has coincided with a surge in trading turnover and over US$600 million of inflows into the iShares USD Asia High Yield Bond ETF in September.
The rotation to the iShares USD Asia High Yield Bond ETF has not extended to China Government Bond ETFs. The ICBC CSOP FTSE Chinese Government Bond ETF (click here for more) booked net outflows of S$18 million in 3Q21, while the Nikko AM – ICBC SG China Bond ETF SGD Class booked inflows of S$1 million.
The iShares USD Asia High Yield Bond ETF has declined 8.7% in USD terms from 30 June through to 4 Oct, with a dividend distribution trimming the decline in total return to 7.7%. In SGD terms, this represents a 7.9% price decline and a 6.9% decline in total return.
The decline in the iShares USD Asia High Yield Bond ETF in the 3Q21, was on the back of the decline in the price of High Yield Corporate Bonds in China, particularly across the China property sector. This is because:
Nevertheless, the iShares USD Asia High Yield Bond ETF is currently providing higher yield with historically lower volatility and more stable default rates relative to developed markets and other emerging market exposures. It targets exposure to a representative universe of more than 300 high yield bonds, thus reducing idiosyncratic risk of individual bonds. In terms of ratings, close to 43% of the portfolio is rated BB, with 30% of the portfolio rated B, with 6% rated CCC and below, while remaining 20% of the portfolio are not rated. The current yield to maturity of the ETF which holds approximately 364 constituents (as of 30 Sep) is 9.3%, based on the Bloomberg YAS yield, while the effective duration of the portfolio, which represents the change in the bond prices for a 1% change in yields, is 3.25 years.
The AUM of the suite of ETFs listed in Singapore in addition to the 3Q21 inflows are tabled below.
ETF Name |
Primary Code |
Sec Code |
Fund Focus |
Issuer |
Total Expense Ratio % |
2020 CY Inflows (S$M) |
1Q21 Inflows (S$M) |
2Q21 Inflows (S$M) |
3Q21 Inflows (S$M) |
2021 CYTD Inflows (S$M) |
AUM S$M |
ICBC CSOP FTSE Chinese Government Bond ETF |
CYC |
CYB |
China Bonds |
CSOP AM |
0.25 |
1505 |
95 |
249 |
-18 |
326 |
1959 |
SPDR® Straits Times Index ETF |
ES3 |
|
Singapore Equities |
SPDR |
0.30 |
777 |
-47 |
-55 |
14 |
-88 |
1650 |
ABF Singapore Bond Index Fund |
A35 |
|
Singapore Bonds |
Nikko AM |
0.25 |
21 |
36 |
10 |
40 |
87 |
1036 |
Nikko AM SGD Investment Grade Corporate Bond ETF |
MBH |
|
Singapore Bonds |
Nikko AM |
0.30 |
80 |
35 |
-14 |
-9 |
11 |
597 |
Nikko AM Singapore STI ETF |
G3B |
|
Singapore Equities |
Nikko AM |
0.30 |
170 |
34 |
21 |
19 |
74 |
590 |
NikkoAM-StraitsTrading Asia ex Japan REIT ETF |
CFA |
COI |
Asia Ex-Japan REITs |
Nikko AM |
0.60 |
66 |
48 |
42 |
-10 |
78 |
323 |
NikkoAM-ICBCSG China Bond ETF SGD Class* |
ZHS |
|
China Bonds |
Nikko AM |
0.30 |
43 |
9 |
5 |
1 |
14 |
60 |
NikkoAM-ICBCSG China Bond ETF RMB Class* |
ZHY |
ZHD |
China Bonds |
Nikko AM |
0.30 |
218 |
|
|
|
1 |
236 |
Lion-Phillip S-REIT ETF |
CLR |
|
Singapore REITs |
LGI |
0.60 |
41 |
21 |
9 |
7 |
37 |
224 |
Lion-OCBC Securities Hang Seng TECH ETF |
HST |
HSS |
China Equities |
LGI |
0.68 |
92 |
91 |
58 |
103 |
252 |
273 |
Lion-OCBC China Leaders ETF |
YYY |
YYR |
China Equities |
LGI |
0.62 |
|
|
|
93 |
93 |
96 |
iShares Barclays USD Asia High Yield Bond Index ETF |
O9P |
QL3 |
Asia Ex-Japan Bonds |
Blackrock |
0.50 |
40 |
68 |
92 |
855 |
1015 |
1178 |
iShares MSCI India Index ETF |
I98 |
QK9 |
India Equities |
Blackrock |
1.03 |
-25 |
|
|
|
|
144 |
iShares Asia Credit ETF |
N6M |
QL2 |
Asia Ex-Japan Bonds |
Blackrock |
0.30 |
25 |
5 |
8 |
10 |
23 |
105 |
Phillip SGD Money Market ETF |
MMS |
MMT |
SGD Money Market |
Phillip |
0.24 |
120 |
-1 |
-3 |
-1 |
-5 |
116 |
Phillip Sing Income ETF |
OVQ |
|
Singapore Equities |
Phillip |
0.97 |
14 |
|
3 |
|
3 |
63 |
Phillip APAC DIV REIT Leader ETF |
BYI |
BYJ |
APAC Ex-Japan REITs |
Phillip |
0.91 |
|
|
2 |
|
2 |
23 |
UNITED SSE 50 CHINA ETF |
JK8 |
|
China Equities |
UOBAM |
2.28 |
-6 |
1 |
|
1 |
2 |
27 |
Principal S&P APAC Dividend ETF |
P5P |
QR9 |
APAC Ex-Japan Equities |
PAM |
1.06 |
3 |
|
2 |
|
2 |
22 |
Principal FTSE ASEAN40 ETF |
M62 |
QS0 |
ASEAN Equities |
PAM |
0.80 |
-1 |
-9 |
|
|
-9 |
11 |
SPDR GLD ETF |
O87 |
|
Gold |
SPDR |
0.40 |
-250 |
-1 |
-43 |
-38 |
-83 |
1358 |
SPDR S&P 500 ETF |
S27 |
|
US Equities |
SPDR |
0.09 |
15 |
5 |
4 |
6 |
15 |
63 |
SPDR® DJIA ETF TRUST |
D07 |
|
US Equities |
SPDR |
0.17 |
1 |
|
|
|
|
4 |
Xtrackers MSCI China UCITS ETF |
LG9 |
TID |
China Equities |
XTrackers |
0.65 |
29 |
8 |
9 |
17 |
34 |
67 |
Xtrackers MSCI Singapore UCITS ETF |
O9A |
|
Singapore Equities |
XTrackers |
0.50 |
-1 |
-2 |
|
1 |
-1 |
15 |
Xtrackers II Singapore Government Bond UCITS ETF |
KV4 |
|
Singapore Bonds |
XTrackers |
0.20 |
-6 |
|
-2 |
|
-2 |
129 |
Xtrackers MSCI Indonesia Swap UCITS ETF |
KJ7 |
|
Indonesia Equities |
XTrackers |
0.65 |
-7 |
-6 |
3 |
2 |
-1 |
18 |
Xtrackers FTSE Vietnam Swap UCITS ETF |
HD9 |
|
Vietnam Equities |
XTrackers |
0.85 |
-4 |
1 |
3 |
-1 |
2 |
18 |
Lyxor MSCI AC Asia Pacific Ex Japan UCITS ETF - USD |
P60 |
|
APAC Ex-Japan Equities |
Lyxor |
0.60 |
-12 |
|
|
|
|
26 |
Lyxor MSCI India UCITS ETF - Acc USD |
G1N |
|
India Equities |
Lyxor |
0.85 |
|
|
|
|
|
16 |
Lyxor MSCI Emerging Markets UCITS ETF - Acc USD |
H1N |
|
EM Equities |
Lyxor |
0.55 |
|
|
2 |
|
2 |
8 |
Lyxor China Enterprise (HSCEI) UCITS ETF - USD |
P58 |
|
China Equities |
Lyxor |
0.65 |
-119 |
|
|
|
|
34 |
Total |
|
|
|
|
|
2829 |
391 |
405 |
1089 |
1885 |
10492 |
** Note the NikkoAM-ICBC SG China Bond ETF has dual class units - SGD (pay dividend) & RMB (accumulating).
Source: SGX, Refinitiv, Bloomberg (Data as of 30 September 2021)
ETFs are investment funds listed and traded intraday on a stock exchange. The majority aim to track the performance of an index and provide access to a wide variety of markets and asset classes, including local stocks, international securities, bonds, commodities or money markets. As with other securities, ETFs maintain market risks with the underlying index tracked by the ETF susceptible to market volatility. Changes of market conditions can affect the price of the underlying, which constitutes the NAV of the ETF, leading to a change in price of the ETF. To find out more about ETFs, click here.
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