KUALA LUMPUR (Sept 10): Malaysia’s exchange traded fund (ETF) market is expected to grow with the back drop of the ASEAN Economic Community (AEC) that will begin in 2015.

According to Deborah Fuhr, partner at etfgi.com who spoke at the ETF & Stock Borrowing & Lending (SBL) Conference 2014 here, global ETFs attracted a net inflow of US$185 billion (RM592.64 billion) at the end of August 2014, and this is expected to continue to grow at a rate of 20-25% globally.

She added that the free flow of labour, financial services and also trade in ASEAN would help ensure best practices and information from different markets to flow from different jurisdictions, hence this is likely to contribute to the growth in the ETF market in Malaysia.

“Being able to cross list products from different markets would help open up investment opportunities. This would mean better cost savings, greater scalability and better performance for the client,” said Fuhr.

In the local context, Peter Lee, Director of ETF’s and Index Investment Division at Samsung Asset Management, said Malaysia presents itself as a vibrant market for ETFs.

“There are positive signs that the whole asset management community and ETFs will grow in Malaysia. We are very interested in Malaysia, because the country has one of the highest mutual fund growths in ASEAN,” he said.

Antoine de Sainty Vaulry, Director and Deputy Head of Equity Derivatives at Commerzbank, said the ETFs are not all that different from unit trust funds that local investors are more familiar with.

“ETFs have the advantages of a unit trust fund, with additional advantages of tradability. A trader can actually play the market, if there is news on certain sectors. The fees are also cheaper and the product is more flexible,” said Vaulry.