Kuala Lumpur: CIMB today announced that it will be offering Malaysia's first Offshore ETFs to interested retail and institutional investors. Managed by CIMB-Principal, the CIMB FTSE ASEAN 40 Malaysia and the CIMB FTSE Xinhua China 25 (jointly referred to as “the Funds”) will be listed on Bursa Malaysia on 13 July 2010 and will be the first offshore ETF listed on the local bourse.

The CIMB FTSE ASEAN 40 Malaysia will effectively feed into the world’s first and only ASEAN ETF – the CIMB FTSE ASEAN 40 – which has been listed on the Singapore Exchange (SGX) since September 2006. As at 31 May 2010 the CIMB FTSE ASEAN 40 in Singapore has recorded 39.64% in total returns since inception. The target fund currently has an AUM of USD155 million. The fund aims to provide investment results that track its benchmark, the FTSE/ASEAN 40 Index. The Index comprises the top 40 stocks in 5 ASEAN countries (Singapore, Malaysia, Thailand, Indonesia and the Philippines), and was designed to promote the regional grouping as an attractive investment destination. As at 31 May 2010, the top holdings in the index include DBS Group Holdings Limited, Singapore Telecommunications Limited, CIMB Group Holdings, United Overseas Bank Ltd, and Oversea Chinese Banking Corporation Ltd.

Meanwhile, the CIMB FTSE Xinhua China 25, Malaysia’s 1st China ETF, aims to provide investment results that closely correspond to its benchmark, the FTSE/Xinhua China 25 Index. The index comprises 25 of the largest and most liquid Chinese stocks listed and trading on the Hong Kong Stock Exchange. Some of the top stocks included in the index as at 31 May 2010 are China Mobile, China Construction Bank, Industrial and Commercial Bank of China, China Life Insurance Co. Ltd, and CNOOC Ltd.

Speaking at the launch of the two ETF prospectuses, Dato’ Sri Nazir Razak, Group Chief Executive, CIMB Group said: “The launch of the CIMB FTSE ASEAN 40 Malaysia and CIMB FTSE Xinhua 25 ETFs are emblematic of our commitment to enable investors to gain exposure to the high growth economic prospects of ASEAN, and of China.”

“ASEAN and China together constitute about half of total Asian GDP, and coincidentally, about 50% of its total population. Therein lies the potential,” he further added.

With the listing of the ETFs, the investing public now bypass the inconvenience of opening multiple foreign trading accounts and the hassle of exchanging money to foreign currencies for their offshore investments. This is because they can now invest in offshore equities from the comfort and convenience of home via their brokers in Ringgit terms and at local brokerage fee rates.

In his welcome address, Campbell Tupling, Chief Executive Officer, CIMB-Principal Asset Management Berhad said that ETFs are gaining popularity with investors, as a different asset class to construct or fill up gaps in their investment portfolio.

“ETFs will appeal to many investors in spite of their relative newness in Malaysia. They have a straightforward structure, are inexpensive to trade, and are as liquid as stocks. In addition, they have the diversification advantages of an index unit trust fund,” Tupling explained. “Since the ETFs are passively-managed funds designed to mirror an index, they have lower expense ratios compared to traditional unit trust funds. Furthermore, an ETF is liquid and flexible as units can be acquired or disposed of in standard lot size as prescribed in the prospectuses,” he elaborated.

Both CIMB FTSE ASEAN 40 Malaysia and CIMB FTSE Xinhua China 25 are managed by CIMB-Principal Asset Management Berhad. Investors may start to subscribe to the CIMB FTSE Xinhua China 25 ETF (in multiples of 1000 units) at the Initial Issue Price of RM1.00 per unit from 9 June to 23 June 2010 prior to its listing; while the CIMB FTSE ASEAN 40 Malaysia will be available for investment once it is listed on Bursa Malaysia on 13 July 2010 (traded in board lots of 100 units).

A series of seminars entitled, “CIMB ETFs and Market Outlook on China and ASEAN” will also be organised from 11 June to 19 June 2010 to provide the public with better understanding on the ETFs. Interested parties are welcome to attend the free seminar. For more information on the Funds, log on to www.cimb.com or www.itradecimb.com, or call 03-2096 1655 or 03-2084 9890.

» Top