ETF Performance Report - September 2022
- ETF market’s activities in September were the softest year-to-date (YTD). Trading activities contracted across all ETFs except GOLDETF, leading to a 37% and 34% month-on-month (M-o-M) contraction in total value and volume traded (September: RM3.83 million (mil)/1.55 mil units, August: RM6.04 mil/2.36 mil units). A subdued Average Daily Value (ADV) in September explained most of the weak monthly activities, with a lower number of trading day (21) in September vs August (22) had its small share of negative contribution. The YTD average monthly value/volume traded was RM8.07 mil and 3.34 mil units, with September marking the fifth consecutive month of below average trading activities.
- Globally, investors’ sentiment remained soft as higher than expected inflation figures in the US reinforced the narrative for the Federal Reserves to further tighten its monetary policy. Elsewhere, the tense geopolitical situations in Europe continued to escalate, dampening the hope for quick diplomatic solutions. In China, key indices extended their retracement as investors were waiting for economic policies clarity post the 20th Party Congress in Mid-October, while analysts have also toned down their expectations for a quick economy re-opening post the Party Congress. The soft investment sentiment can also be seen in foreign investors outflow from ASEAN-5 equities in September (-RM1.12 billion (bil)), though on a YTD basis these markets are still registering a net inflow.
- Trading interests in GOLDETF improved despite net asset value (NAV) staying flat. M-o-M GOLDETF’s value traded more than doubled (+138%) to RM1.45 mil, off the YTD low of RM0.61mil recorded in August. As a whole, this ETF contributed 38% to the ETF market’s overall traded value in September. NAV (valued in RM) largely flat M-o-M as the price decline in the underlying asset (LBMA Gold Price AM in USD term) was offset by the weaker RM. Investment narrative on this asset saw a shift towards the end of September as market commentators flagged the possibility for both US Treasury yield and the US Dollar to peak in the short-term – thus softening the headwinds that have been keeping the precious metal under pressure over the past two quarters. Technically, gold reacted positively after testing the lower-bound of its two-year sideways trading range, if further positive price development is observed in the immediate-term, investors’ sentiment towards this metal may improve.
- China-centric ETFs’ (including inverse) activities cooled the most by value. On a combined basis, the 6 China-centric ETFs saw activities contracted by 61% M-o-M to RM1.73 mil (August: RM4.43 mil) – marking their lowest YTD activities level. The contraction in trading activities was across all the ETFs. The prolonged soft economic figures, tone down in the re-opening expectations and Taiwan-related events pushed investors to adopt a wait-and-see attitude towards Mainland stocks. Technically, the Shanghai Composite Index’ breakdown from its 50- and 100-day SMA lines in September were also not helping the market’s sentiment.
