The Emergence of ETFs in Asia-Pacific by Adam Marszk & Ewa Lechman & Yasuyuki Kato

Author:Adam Marszk & Ewa Lechman & Yasuyuki Kato
Language: eng
Format: epub
ISBN: 9783030127527
Publisher: Springer International Publishing

According to data extracted from the reports of the World Federation of Exchanges (see Table 4.2), turnover of ETFs in Malaysia has reached the highest maximum value among the four countries included in the least developed category—approximately 135 million USD in November 2016. However, this value should be regarded as an outlier as the mean turnover has been second-lowest in the entire sample—by the end of the analyzed time period, it has dropped even more substantially to the historically lowest levels. Nevertheless, there are some important features of the Malaysian market—its significant part (at least in some segments) are Shariah funds12—according to Prakasa (2012), it was the first listing location of such funds in the entire Asia-Pacific region. MyETF Dow Jones Islamic Market Malaysia Titans 25 ETF has been traded since January 2008, and it is aimed at tracking the 25 largest companies domiciled in Malaysia that are evaluated as Shariah-compliant.13 Shariah ETFs may be perceived within the broad category of Islamic finance industry (or global Islamic wealth management) (Bursa Malaysia 2009; Farouk and Masih 2016). There are a number of requirements that must be met by ETF in order to be able to label itself as Shariah-compliant, which refer above all to the range of possible portfolio holdings and include (for more details see Prakasa (2012), Downes (2016), Rahman (2016), or Gad and Andrikopoulos (2019)):1.Investing exclusively into securities of companies that adhere to the Shariah principles (e.g., stocks of conventional banks or tobacco companies are excluded).

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