I-VCAP sees growing participation in M’sian ETF market

KUALA LUMPUR: i- VCAP Management Sdn Bhd expects increased participation and promising growth in the Malaysian exchange traded fund (ETF) market.

Two of its five Islamic or syariah-compliant ETFs, MyETF MSCI Malaysia Islamic Dividend (MyETF-MMID) and MyETF Dow Jones Islamic Market Malaysia Titans 25 (MyETF-DJIM25), saw significant increase in trading volume from January to April in financial year 2018 (FY18) versus the previous year.

In the first four months of FY18, MyETF-MMID saw 28.77 million units traded versus 185,900 over the corresponding period in FY17, an increase of 155 times while MyETF-DJIM25 recorded 22.91 million units, up 258 times from 88,800 units traded over the same period last year.

“The increase in trading volumes of MyETF-MMID and MyETF-DJIM25 was promising because it signals growing interest in ETFs. Our view is that domestically-listed ETFs such as our syariah-compliant MyETF

The increase in trading volumes of MyETF-MMID and MyETF-DJIM25 was promising because it signals growing interest in ETFs. Our view is that domestically-listed ETFs such as our syariah-compliant MyETF series remain an attractive investment tool for investors looking to manage beta while riding volatility. Khairi Shahrin Arief Baki, i-VCAP chief executive officer

series remain an attractive investment tool for investors looking to manage beta while riding volatility.

“At the same time, investors can engage in active stock picking to generate alpha,” said i-VCAP chief executive officer Khairi Shahrin Arief Baki in a statement.

He added that awareness on ETF investing remained low, particularly with regard to its trading flexibility, liquidity and affordability with lower management fees and transaction costs as compared to an actively managed fund.

“For ETFs to really gain traction, we also have to ensure that retail, sophisticated, and institutional investors are fully informed and understand the benefits and risks of ETFs as an investment tool,” said Khairi Shahrin Arief.

To plug this awareness gap, i- VCAP will also work closely with all industry stakeholders in supporting educational programmes on ETF investing.

i-VCAP regularly participates in various investor education roadshows and has also begun conducting talks at various universities to engage educators, next generation of investors, and future professionals in the investment field on the potential of ETFs. — Bernama