Alexa

Yuanta Polaris introducing Gold Futures ETF

  111
Yuanta Polaris introducing Gold Futures ETF

Financial Supervisory Commission Chairman Tseng Ming-chung noted recently that the market for Exchange-traded Funds (ETFs) is developing steadily in Taiwan and urged investors on the island to make more use of the instruments.

Tseng remarked that ETFs are already in widespread use in international investment circles and now Taiwan is working to integrate its efforts with markets around the world. The Taiwan stock market already offers interested investors opportunities in ETFs based on local stocks as well as Chinese stocks in both leveraged and inverse trading as well as commodity raw materials, providing trading strategies and solutions that make the TAIEX ETF lineup even stronger and more complete.

Tan Shi-ping, an associate manger in the Futures Division of Yuanta Securities Investment Trust (SITC) says that the global market for ETFs for gold reached 131 funds in 2014, amounting to more than US$62.1 billion and accounting for close to 60% of all trading in commodity ETFs. In Asia, gold ETFs have become essential commodities in every market where they are offered.

To keep up with the pace of developments in the international market, the Taiwan Stock Exchange (TSE) is now offering ETFs for gold futures through Yuanta Polaris. The main investment targets for the fund will be New York Mercantile Exchange (NYMEX) gold futures, tracking the S&P Goldman Sachs GSCI Gold Excess Return index, currently the world's leading index for this section of the market.

Yuanta Polaris expects to be listed on the TSE as Yuanta Gold by mid-April, according to manager Fang Li-kuan of the firm. Yuanta Gold will be based on gold futures and is committed to minimizing deviations between the fund and the underlying index. Like all ETFs, an outstanding feature of the fund will be keeping the level of risk far below that associated with conventional futures trading.

A spokesperson for TSE also emphasizes that other than a small portion to be used for buying futures on margin, most of the funds will remain in the account for cash management or deposited in current or long-term accounts or in the short-term money market.