Affin Hwang AM managing director Teng Chee Wai said:
KUALA LUMPUR: Affin Hwang Asset Management Bhd (Affin Hwang AM) has partnered with Samsung Asset Management (Hong Kong) Ltd to develop and offer leveraged and inverse (L&I) ETFs for Bursa Malaysia.
This collaboration will provide local investors access to sophisticated investment instruments at a low-cost and efficient entry point to amplify or hedge returns depending on prevailing market conditions and the investor’s own risk-appetite and objective, they said in a joint statement on Tuesday. .
“Under the terms of the partnership agreement, Affin Hwang AM will appoint Samsung as its investment adviser to provide advisory services in the management of its derivative type ETFs including L&I products through shared resources and expertise,” the statement said.
Leveraged ETFs use futures contracts to provide a multiple of the underlying index’s daily return (positive or negative) while inverse ETFs allow investors to gain from downward market.
Affin Hwang AM managing director Teng Chee Wai said: “We are excited to join hands with Samsung to pioneer a new range of ETF strategies to meet the growing needs of investors.”
“Given Samsung’s strong capabilities and success in managing L&I products, we believe that we are able to capitalise on their expertise to complement our growth strategy. Samsung was the first asset management firm in the region to launch futures-based ETFs in Asia, and has been managing L&I products since 2009,” he said.
Samsung Asset Management Co., Ltd. chief investment officer/ executive vice president Jaekyu Bae said:“We are excited with our new partnership with Affin Hwang AM to bring innovative products to Malaysian investors.
“When first introduced in Korea in 2009, Leveraged and Inverse products acted as a catalyst for the growth of the overall ETF market, with renewed interest from both retail and institution segments for ETFs. We hope to achieve the same in Malaysia.”
The collaboration is also seen as timely after the Securities Commission had on Monday by allowed the issuance of a more diversified range of ETFs on Bursas Malaysia with effect from January 2, 2019.
The range of ETFs which the fund management companies will be allowed to be issued include futures-based ETFs, synthetic ETFs, physical commodity ETFs and smart beta ETFs.
Teng said the SC's new ETF framework would will pave the way for a broader range of ETF offerings beyond plain-vanilla products.
“This would bolster growth for the industry by stimulating demand and attracting greater investor participation.”
“Through continuous investor engagement and education programmes, we believe that demand for such investments will only grow over time, as investors employ more sophisticated forms of enhanced index and hedging strategies as building blocks in their portfolio,” he said.
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