• Tap into Southeast Asia (SEA) and India’s 30 largest technology companies via the new CSOP iEdge Southeast Asia+ TECH Index ETF (stock codes: SQQ/SQU) – capturing the performance of top 30 technology companies domiciled in India, Singapore, Indonesia, Thailand, Vietnam and Malaysia.
   
• SEA+ (including India) forms the world’s third largest economy next to US and China and its economic growth rate is expected to be the highest in 2023-2027. At over 2 billion in population, the region accounts for 27.4% of the world’s working population, and exports over US$1.7 trillion worth of goods, which has multiplied over 3.5 times in almost 2 decades.
   
• Despite the region’s number of internet users almost doubling since 2015, digital penetration still has room for growth potential – the e-Conomy SEA 2022 report released by Google, Temasek and Bain & Co predicts that market could reach as US$1 trillion by 2023.
   
• Top 10 holdings in the ETF include Sea Ltd, Delta Electronics Thailand, Astra International, Infosys Ltd, Wipro Ltd, Grab Holdings, Venture Corp, Jardine Cycle & Carriage, Elang Mahkota Teknologi, and MakeMyTrip Ltd.

Capture the growth of Top 30 SEA and India tech-focused companies in one trade

The CSOP iEdge Southeast Asia+ TECH Index ETF commenced trading on 20 June, offering market participants direct access to the 30 largest technology companies domiciled in Southeast Asia and India – namely India, Singapore, Indonesia, Thailand, Vietnam and Malaysia.

The ETF tracks the iEdge Southeast Asia+ TECH Index which captures companies primarily in technology related sectors such as Information Technology, Software and Consulting, Car Manufacturing, Electronic Components and Manufacturing, Retail, and Media Services. The Index has a basket size of 30 stocks and is free float market cpaitalisation weighted with a 10% stock cap on each individual index constituent.

The index has a combined market capitalisation exceeding US$127 billion and latest 12m dividend yield of 1.9% as at 28 April 2023. On a total return basis, the index has generated over -12.5%, 34.0% and 14.2% in annualised returns over a 1, 3, and 5 year period respectively.

Why Southeast Asia+ and TECH?

Booming middle class – At over 680 million in population, Southeast Asia (or ASEAN) is the third most populous region in the world after China and India. Including India (or SEA+ in short), that is over 2 billion in population, and the region accounts for 27.4% of the world’s working population, and exports over US$1.7 trillion worth of goods, which has multiplied over 3.5 times in almost 2 decades.

Rising digital penetration – Despite the region’s number of internet users almost doubling since 2015, digital penetration still has room for growth potential. Given that 100 million additional internet users have come online in the last 3 years, the e-Conomy SEA 2022 report released by Google, Temasek and Bain & Co predicts that market could reach as US$1 trillion in gross merchandise value by 2023. In fact, ASEAN’s digital economy has approached US$200 billion in gross merchandise value in 2022, 3 years earlier than expected!

More about the iEdge Southeast ASIA+ TECH Index (read for more)

The index is reviewed quarterly in March, June, September and December and companies must satisfy the following 3 criteria to be eligible for index inclusion: sector inclusion, sector exclusion, and identification of conglomerates with sufficiently large Tech-related revenue contributions.

• For sector inclusion, more than 40% of a company’s revenue must be generated from the sectors; the threshold is lowered to 30% for existing constituents.
   
• For identification of conglomerates with sufficiently large Tech-related revenue contributions, more than 50% of a conglomerate’s revenue must be generated from the sectors; the threshold is lowered to 40% for existing constituents. SGX defines conglomerates as companies with more than or equal to 25 entities.

The index is weighted by free-float market capitalisation (foreign ownership adjusted) and constituents will have their weights capped at 10%. India-domiciled companies will have their total index weight capped at 50%.

Some key risks relating to the ETF (read for more)

• Market & Credit Risk – The net asset value of the shares of the sub-fund will fluctuate with changes in the market value of the securities held by the sub-fund and the price of shares and income from them may go down as well as up.
• Liquidity Risk – Trading volumes in the underlying investments of the sub-fund may fluctuate significantly depending on market sentiment.
• Emerging Markets Risk – Investments by the sub-fund in emerging markets often involve a greater degree of risk due to the nature of such markets which do not have fully developed services.
• Currency Risk – Fluctuations of the exchange rate of currencies other than its base currency may have an impact on the investments and income of the sub-fund and affect the value of the shares.
• Technology Sector Risk – Susceptible to factors affecting technology-related industries and may be subject to greater government regulation than other industries.

Key trading information on the ETF

• Counter Name: CSOP SEA TECH ETF S$ / CSOP SEA TECH ETF US$
• Ticker: SQQ (SGD) / SQU (USD)
• Base currency: USD
• Trading currency: USD / SGD
• Trading board lot size: 1 Share
• Management Fee 0.99% per annum of the net asset value
• Fund Manager: CSOP Asset Management Pte. Ltd
• Custodian: DBS Trustee Limited

The table below details the broader SGX’s ETF suite with total combined AUM of S$10.9 billion as of 20 June 2023.

Data from SGX, Bloomberg, as of 20 June 2023.

*CSOP iEdge Southeast Asia+ TECH ETF was only listed on 20 June 2023.