Exchange traded funds (ETFs) have taken off here in the U.S. and are growing in Europe.  But what about Asia?  Jim Wiandt for Index Universe has some interesting thoughts surrounding the Asian ETF market.

  • The Asian ETF market hasn’t taken off. There is no real clear reason why it hasn’t, but suggestions range from Asian investors not being indexers to not enough push to develop the ETF market.
  • Asian governments using ETFs as a tool. The Hong Kong TRAKR is an ETF product that the government used as a way to stabilize the economy.  Malaysia is now looking to do the same thing in an effort to bring its country back into the investing mainstream.
  • China – Boom, Bubble or Both? Observing resources and growth potential, China has a future the way Japan never could. With an 8-9 month stretch of doubling its market cap, the Chinese stock market scaled new heights – is a pullback coming or can there still be more ahead?
  • A shares or H shares? Hang Seng has put together an index that tracks the A Share/H Share premium/discount.  The A Shares are trading at a huge premium – 60% higher than H Shares.  This premium could go away if China opens the Hong Kong market to mainland investors.
  • Asian investor mentality. With Chinese investors and their new found wealth they are driving the market.  Wiandt compares this to U.S. investors driving up the tech market to insane heights.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.