Sharechat Logo

NZX's Smartshares emerging markets ETF swells by almost 50% with new subscription

Thursday 8th February 2018

Text too small?

NZX's Smartshares emerging markets fund has grown by almost half with an institutional investor subscribing for $28.7 million new units in the passive investment vehicle. 

Reuters data show almost 21.9 million units were traded at a price of $1.312 apiece today, which an NZX spokeswoman confirmed was a subscription for new units understood to be an existing institutional investor.

That's the biggest subscription for the fund, which is invested in the Vanguard Emerging Markets exchange traded fund, since it launched in August 2015 with 30.4 million units. Prior to today, the fund had 44.3 million units on issue. The ETF aims to track the FTSE emerging markets ETF, which invests in companies from emerging markets such as China, Brazil, Taiwan and South Africa.

The new subscription follows heightened market volatility around the world which saw a selloff in global equities, and the NZX-listed ETF trading price is at a month-low. The fund allotted 30,000 new units yesterday and had a net tangible asset backing of $1.317 per unit. The units recently traded at a discount, down 0.9 percent today to $1.308. Still, the units are up 25 percent over the past year. 

The Vanguard FTSE emerging markets fund fell 2.8 percent to US$46.51 in New York overnight, the lowest it's been since late December. The Vanguard fund's total net assets were US$100.9 billion as at Jan. 31, of which its five biggest holdings were WeChat developer Tencent Holdings, South African media group Naspers, Taiwan Semiconductor Manufacturing, Alibaba Group, and China Construction Bank. 

The Smartshares emerging markets subscription is the second chunky purchase of new units in one of NZX's ETFs this year. An institutional investor subscribed to 4.2 million new units in the global bond fund ETF on Jan. 11, a day the yield on 10-year US Treasuries rose to a 10-month high on reports China was considering slowing its purchases of US federal government debt. The global bond fund, which has 49.1 million units on issue, recently slipped 0.1 percent to $3.148 and was up 1.9 percent over the past year. 

NZX sees ETFs as one of several strings to reinvigorate growth in the capital market, linking the vehicles to a broader suite of products and new distribution channels to attract a different investor to the public market.

The acquisition of SuperLife in 2014 was a key plank to expanding that product range adding $1.27 billion of funds under management at the time to NZX's existing $400 million managed in its Smartshares division. The stock market operator's Smartshares funds under management have grown to $2.17 billion as at Jan. 31, of which $1.45 billion is in SuperLife funds. 

NZX shares were unchanged at $1.12, up 1.8 percent over the past 12 months. 


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar ekes out 0.1% weekly gain, treading water amid geopolitical turbulence
MARKET CLOSE: NZ shares up as Comvita, A2 rebound from weakness, Steel & Tube keeps dropping
NZ dollar ekes out 0.1% weekly gain, treading water amid geopolitical turbulence
NZ Meat Board chases higher returns from $70M of funds now held in term deposits
NZ industrial property offers ‘good returns’, analyst says
Top oil analyst slams 'errors and misrepresentations' in govt's offshore exploration ban
Augusta earnings fall as delayed fund pushes out fees, boosts costs
Stats NZ takes over property transfers data from LINZ, expects to paint fuller picture of market
Anzco Foods says annual pre-tax profit fell 90% on tough year for beef processing
Veritas' Morton to step down after Nomura deal announced

IRG See IRG research reports