Taiwanese Stock Exchange welcomes inverse and leveraged TOPIX ETFs

Sep 9th, 2015 | By | Category: ETF and Index News

The Taiwanese Stock Exchange has announced the listing of two new exchange-traded funds, the Fubon Topix Leveraged 2X Index ETF and the Fubon Topix Inverse -1X Index ETF, providing leveraged and inverse exposure to Japan’s TOPIX Index.

Taiwan lists ETFs tracking short or leveraged TOPIX returns

The newly listed ETFs are Taiwan’s first to track short or leveraged returns of Japan’s TOPIX index.

“The TOPIX – Tokyo Stock Price Index – is one of the major indexes on the Tokyo Stock Exchange, with more than 1,800 constituents, and it has become a barometer of the development of Japan’s capital market,” notes the Taiwanese Stock Exchange.

The launch marks the first ever leveraged and inverse ETFs in Taiwan to follow the Japanese market, expanding the breadth of tools available to local investors and facilitating greater integration of capital markets within the Asia-Pacific region.

The ETFs had attracted NT$1.07 (US$33m) in demand when order books closed on 24 August 2015.

This is one of the major developments of a memorandum of agreement between Taiwan and Japan, signed in 2006, which sought to facilitate integration of their capital markets and enhance transparency for investors on both sides. Taiwanese investors appear to have a growing appetite for Japanese investments as they look to diversify their asset allocations and expand their options for tactical positioning with inverse and leveraged products.

According to the Taiwan Securities Association, around NT$10.9bn (US$337m) was channelled to Japanese securities via Taiwanese sub-brokerages between January and July 2015. NT$10.4bn (US$321m) was invested in equities and NT$500m (US$15.4m) was through ETFs however the listing of further Japanese-tracking ETFs in Taiwan is likely to boost these funds market share of transactions as investors prefer their lower cost diversified nature.

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