KUALA LUPUR: Affin Hwang Asset Management Bhd’s smart beta exchange traded funds (ETF) were listed on the Main Market of Bursa Securities on Wednesday.
It said on Wednesday the TradePlus MSCI Asia ex Japan REITs Tracker and the TradePlus DWA Malaysia Momentum Tracker seek to combine the best of both active and passive strategies by investing in companies based on a series of objective factors.
Affin Hwang AM explained Smart beta ETFs apply a series of objective factors when selecting its component companies. These component companies are then ranked and weighted according to specific factors such as earnings growth, price momentum or dividend yield.
“This approach provides an alternative strategy compared to traditional market-cap weighted ETFs which are biased towards larger-cap stocks because they constitute a heavier weight in an index.
“By complementing their portfolio with smart beta strategies, investors can potentially exploit market anomalies and uncover hidden value to reap better risk-adjusted returns, ” it said.
Both ETFs were launched at an initial issue price of RM1 per unit.
Affin Hwang AM managing director Teng Chee Wai said the new ETF solution was for investors to grow their wealth.
“This is also in line with the regulator’s revised guidelines that allow for greater product innovation within the ETF landscape through the introduction of smart beta strategies.
“With its low-cost advantage, smart beta ETFs are ideal building blocks for investors to pile on different strategies such as dividend or momentum factors to construct a diversified portfolio, ” he said.
Affin Hwang AM said the TradePlus MSCI Asia ex Japan REITs Tracker seeks to provide investors access to the highest and most consistent dividend-yielding REITs in Asia (excluding Japan) through the smart beta selection of the index.
Investors can add a measure of stability in their portfolios through consistent dividend pay-outs from REITs. The strategy has historically provided an average annual dividend yield ranging between 4% to 5% per annum.
As for the TradePlus DWA Malaysia Momentum Tracker, Affin Hwang AM said it aims to provide investors exposure to local stocks with the highest price momentum as its smart beta factor.
Being the country’s first momentum strategy on Bursa, investors can potentially reap higher returns by capturing stocks with the most upswing momentum to ride the recovery in the local stock market.
The two ETFs bring the company’s total ETFs to eight, making Affin Hwang AM the largest ETF provider in Malaysia (in terms of number of ETFs listed) as it continues to expand its product suite.