STOXX ASEAN ETF launched on Singapore Exchange

Apr 6th, 2017 | By | Category: Equities

STOXX, the index business of Deutsche Boerse Group, has licensed the STOXX ASEAN Select Dividend 30 Index to One AM, Thailand’s largest equity ETF issuer, to underlie a new ETF that has launched on Singapore Stock Exchange. The launch marks the first time ever that an ASEAN dividend ETF has been issued.

STOXX ASEAN Select Dividend 30 Index

The STOXX ASEAN Select Dividend 30 Index provides exposure to the 30 companies with the highest dividend yields from ASEAN countries.

The One STOXX ASEAN Select Dividend Index Fund (SGX: ONESTOX) provides exposure to companies with high dividend yields from six member states of the Association of Southeast Asian Nations (Malaysia, Philippines, Thailand, Singapore, Indonesia and Vietnam), a high growth region.

Matteo Andreetto, Chief Executive Officer, STOXX, commented: “Dividend investing has become an important source of yield in this low interest rate environment. We are delighted that ONE AM has chosen this innovative smart-beta strategy index to mark their first ETF listing under the ASEAN collection fund scheme in Singapore.”

Pote Harinasuta, Chief Executive Officer, One AM, added: “We are immensely proud to be Thailand’s first smart beta ETF issuer in the ASEAN region on the Singapore Exchange; with our appreciation extending to all our partners who have been involved in making this landmark deal successful, especially STOXX Limited who helped to construct such an innovative smart-beta strategy, together with a benchmark that forms the basis of ASEAN investing going forward. As one of the fastest growing regions in the world, the ASEAN economies are catching a lot of attention globally hence we are creating here a direct access to a diversified portfolio of high dividend paying ASEAN stocks under one roof for all investors worldwide.”

The underlying index is derived from the STOXX Asia Total Market Index, encompassing all stocks listed in ASEAN countries. The methodology excludes companies whose three-month average daily traded volume is less than $2 million, whose payout ratios are higher than 80%, whose foreign investment capacity is below 4% and those that are real estate investment trusts (REITs).

It then selects the top 30 companies based on dividend yield. The number of constituents from each country is limited to seven (five in Thailand’s case), preventing any one country from dominating the index.

The selection is made annually in March and, in order to retain turnover, a 20-40 buffer rule is applied when reviewing the index.

Components are weighted equally and the index is rebalanced on a quarterly schedule. It is calculated in price, net and gross return versions for euro and US dollars.

The largest country exposure in the index is Singapore (23.9%), followed by Malaysia (23.5%), Indonesia (22.7%), Thailand (16.8%), Philippines (10.1%) and Vietnam (3.1%). The largest sector exposures are to banks (26.5%), industrial goods & services (16.8%), oil & gas (13.3%) and telecommunications (10.3%).

Chew Sutat, Head of Equities and Fixed Income, Singapore Exchange, said: “We welcome this ETF with a dividend strategy index as underlying listed on SGX, and thank OneAM for choosing Singapore as its sole listing destination, providing our investors a product to invest in ASEAN’s economic growth, at the same time enjoy stable returns from its income-investing strategy. This is a timely listing that provides investors with a convenient and low-cost access to the growing popularity of smart-beta investment strategies. ”

The ETF has management fees that will not exceed 2.5%.

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