Asia has been the growth engine of the world in the past decade, with the developing markets outside of Japan leading the way. The Asia ex Japan (AxJ) economies, led by China, have recorded higher growth rates than the developed economies over the past decade and are expected to continue this rapid upward trend.
HKEX has just published a research report examining investment opportunities in Asian growth markets and the risk management tools for AxJ thematic investment that captures these growth opportunities. China and ten other top Asia ex Japan economies together constituted 24 per cent of the world’s GDP in 2016 in nominal terms, which is close to the United States’ share of 25 per cent and higher than that of the European Union at 22 per cent.
Many Asia ex Japan economies have grown faster than developed economies over the past 10 years and are expected to continue their relatively strong growth thanks to free trade initiatives in the region, China’s Belt and Road Initiative, economic cooperation initiatives among countries in the Association of South East Asian Nations (ASEAN), the domestic economic development plans of individual nations, bilateral trade and economic agreements, and deepening regional integration.
In light of the potential offered by Asian growth economies, AxJ thematic investments have become increasingly appealing to global investors. Specific benchmarks have been developed to track the investment performance in the AxJ capital markets, including the MSCI AC Asia ex Japan Index and FTSE Asia ex Japan Index. The investment return tracked by the AxJ benchmark index in 2017 outperformed the developed markets and the world market as a whole.
The AxJ market indices serve as benchmarks for passive investment tools such as exchange traded funds (ETFs), which have become increasingly popular, particularly to tap Asia’s growth potential. In fact, among the AxJ thematic investment tools, including mutual funds, ETFs on the MSCI AxJ Index have the highest value of assets under management (AUM), which has also been growing significantly over time. Trading in the related ETF listed in Hong Kong has also grown substantially in recent years.
As with any investment, however, AxJ investments have some potential downside risks. These include the current trend of interest rate hikes, US tax reform and trade protectionism, and the vulnerability of the AxJ markets to uncertainties. Investors seeking to manage AxJ risk have traditionally had to turn to European exchanges, such as Eurex and ICE Futures Europe, as no similar product was available on Asian exchanges. That ends on 11 June when theMSCI All Country Asia ex Japan Net Total Return Index Futureswill be launched to serve the needs of global investors.
Please tap Read More to read the full report.
文章来源：微信公众订阅号“ 香港交易所脈搏/HKEx Pulse”2018年6月6日（本文观点仅代表作者作为一位研究人员个人的看法，不代表任何机构的意见和看法）