To gain from robust growth momentum in Taiwan, fund investments tracking the TAIEX benchmark or its shares will soon be available to overseas investors including those in South Korea and Singapore, two asset management companies said yesterday.
“Such [fund] investments are the right products at the right time because local growth momentum appears to be strong,” Alex Huang (黃昭棠), head of the index investment department at Polaris International Securities Investment Trust Co (寶來投信) in Taipei, said in a telephone interview yesterday.
Polaris plans to team up with the securities arm of the Development Bank of Singapore (DBS, 星展銀行) to list exchange traded funds (ETF) tracking the TAIEX on the Singapore Exchange (SGX) in the third quarter of this year, Huang said.
Meanwhile, Yunsik Chung, chief investment officer of ING Securities Investment Trust (Korea) Ltd, told Reuters in Taipei that his company was scheduled to kick-start sales in the South Korea market of mutual funds that only invest in TAIEX shares on Monday the Chinese-language Economic Daily News reported yesterday.
Chung left Taipei yesterday and wasn’t available for comment.
However, his company’s Taipei branch confirmed that Chung had expressed optimism about the local market.
Chung was looking forward to the policies of president-elect Ma Ying-jeou’s (馬英九) incoming government’s to boost Taiwan’s economy by improving ties with China, ING Taipei said.
He also believes that Taiwan’s information technology sector will soon hit bottom and, therefore, “now is a good time to enter the TAIEX,” Chung was quoted as saying.
Huang was also upbeat about sales of ETFs in Singapore.
He said that DBS’ securities outlets, which will work as the fund’s participant dealers, have more than 200,000 clients, which will provide a base for the new fund.
Polaris plans to raise at least US$20 million in the funds by year’s end, Huang said.
It hopes to attract oil dollars from Islamic investors in the city-state by providing a vehicle for them to expand their exposure in TAIEX shares, he said.
Huang said that he believes the company’s new fund will outperform another ETF —which tracks the MSCI Taiwan index and is traded by Societe Generale on the SGX — since its products will provide a management mechanism that will allow investors to gain from the fund’s up-charges.
The SGX has agreed to offer preferable regulatory terms to facilitate sales of such a cross-border fund, to be traded by companies in both countries.
Huang said that Taiwanese ETFs have a rosy trade record and have an average daily turnover of around NT$1 billion (US$32.4 million).