JPMorgan’s new Taiwan-listed active ETF tracking US tech stocks will be open for public subscription from Sept. 30 to Oct. 3.
Asset managers from New York to Seoul are scrambling to launch products to meet the seemingly insatiable demand for US technology stocks from Asia’s retail investors.
JPMorgan Asset Management and Mirae Asset Global Investments have this month launched exchange-traded funds that give individual investors in Taiwan and South Korea, respectively, access to shares of American tech giants, one of the hottest and most crowded equity trades globally.
That takes the number of US tech-focused ETF launches in Asia this year to 19, on pace to eclipse the record 22 debuts seen last year, according to data compiled by Bloomberg Intelligence. Overall, there are 63 such ETFs now.
Fund houses are racing to get a slice of the billions of dollars in capital from Asia’s retail-heavy markets, where day traders are keen to ride a breakneck rally in the so-called Magnificent Seven cohort. These megacap US tech stocks have helped the Nasdaq 100 Index more than double since the end of 2022.
New launches are continuing even as Asia-listed US tech ETFs have posted net outflows in excess of $500 million over the past three months amid concerns the tech rally is overheating and concentration risks are building up in some stocks.
Despite the recent withdrawals, the category still has more than $4.3 billion of net inflows to show for when looking at the past three years, according to data compiled by Bloomberg. Up more than 4.5% this month through Sept. 24, the Nasdaq 100 is poised for its best month since June as investors bet that the Federal Reserve’s interest-rate cuts and optimism around artificial intelligence will keep the sector’s gains going.
“In Asia, US tech still remains a strong area of growth with a lot of opportunities for issuers,” said Rebecca Sin, an ETF analyst for Bloomberg Intelligence. Recent outflows “could be the result of profit taking, given how well the US tech sector has done this year,” she said.
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ETF Boom in Asia
Asia’s broader ETF universe is also growing fast. There were 461 new launches in the first eight months of the year, according to data from Bloomberg Intelligence. That’s poised to beat last year’s record of 508.
Total ETF assets in the region are projected to swell to $8 trillion by 2035, led by China, from about $2 trillion currently, according to BI. That’s versus roughly $12.5 trillion for the US market.
JPMorgan’s new Taiwan-listed active ETF tracking US tech stocks will be open for public subscription from Sept. 30 to Oct. 3. The asset manager’s active ETF lineup is a key target of growth for its business across the region, said Philippe El-Asmar, head of APAC ETF, digital & direct at JPMAM.
As for Mirae, the fund launched in Seoul this month by its Tiger ETF arm will focus on artificial intelligence-linked software names in the US market.
“The surge in retail participation has created a powerful pull for new product development,” said Nathan Namki Kim, head of the ETF management business unit at Mirae Asset, referring to Korea’s market.