Record Growth of ETFs in Asia-Pacific Driven by Fixed Income

Record ETF Growth in the Asia-Pacific Region

As the investment landscape evolves, the Asia-Pacific region has become a beacon of opportunity, particularly for Exchange Traded Funds (ETFs). Intercontinental Exchange (NYSE: ICE) has recently reported significant growth in assets under management (AUM) for ETFs that are benchmarked to their indices. This growth reflects a strong uptrend driven by rising retail interest in fixed income and thematic investing.

Surge in Passive AUM

At the close of 2024, the passive AUM linked to ICE indices reached approximately $45.15 billion, marking an impressive increase of over 70% from the previous year. This is particularly noteworthy when one considers that the figure has increased tenfold since ICE acquired the BofA Indices back in 2017. A significant factor in this growth has been the launch of numerous new ETFs, with 30 newly launched funds in 2024 alone, far exceeding the previous record of 13 in 2023.

Expansion Across Asia

The breadth of ICE's impact can be observed through the specific figures in various countries. For instance, Taiwan stands out with 53 ETFs from 15 issuers now tracking ICE indices, showcasing a staggering 67% increase in combined AUM at year-end compared to December 2023. Meanwhile, Japan, Australia, and South Korea also displayed impressive growth rates of over 400%, 69%, and 65%, respectively.

ICE's Commitment to Innovation

Magnus Cattan, Vice President and Head of Client Development in Asia, remarks on the remarkable evolution of ICE’s index business in the region, stating that it mirrors the overall growth of Asia as a significant asset management hub. The company looks forward to collaborating with ETF issuers to tailor indices that align with the diverse investment needs of their clients.

Broadening Investment Horizons

ICE plays a crucial role in offering a versatile array of indices, exceeding 7,000 globally across categories such as equity, fixed income, commodity, and foreign exchange. Together, these indices support essential benchmarking and performance measurement processes for investors. As of the year's end, ICE had an impressive combined AUM of around $2 trillion across both active and passive strategies.

Investor Adoption of ETFs

Preston Peacock, Head of ICE Data Indices, highlighted that fixed income has significantly contributed to this AUM surge, largely due to elevated interest rates and a wide variety of fixed income ETFs available in the market. It is encouraging to witness that investors are increasingly favoring ETFs as their investment vehicle of choice.

Leveraging Extensive Data Services

ICE’s indices rely heavily on the comprehensive pricing and reference data from ICE Data Services Pricing & Reference Data LLC. This encompasses evaluated pricing for nearly 3 million securities, along with detailed reference data on approximately 79 million financial instruments, thereby enhancing the investment decision-making process significantly.

About Intercontinental Exchange (ICE)

Intercontinental Exchange, Inc. (NYSE: ICE) is a recognized leader in financial technology and data services, connecting people to opportunities and improving transparency and efficiency across various asset classes. The company provides essential digital networks that play a pivotal role in capital raising and risk management.

The innovative tools and platforms offered by ICE span across futures, equity, and options exchanges, including the renowned New York Stock Exchange. As part of its diversified service offerings, ICE is committed to transforming U.S. housing finance through its mortgage technology services.

Frequently Asked Questions

What contributed to the record AUM growth for ETFs?

The growth was primarily driven by increased retail interest in fixed income and thematic investing, alongside the launch of new ETFs linked to ICE’s indices.

How many new ETFs were launched in 2024?

In 2024, a record 30 new ETFs were launched in Asia, marking a significant increase in product offerings.

What is the total AUM linked to ICE indices as of December 2024?

The total passive AUM connected to ICE’s indices reached approximately $45.15 billion at the end of 2024.

Which countries saw significant AUM growth?

Japan, Australia, South Korea, and Taiwan all reported remarkable AUM growth percentages, highlighting the widespread adoption of ICE’s indices.

What role does ICE play in the financial market?

ICE provides essential financial technology and data services, enabling efficient trading and clearing across various asset categories, fostering a transparent investment environment.

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