Stoxx Ltd is expanding its footprint in the Asia-Pacific region as smart beta strategies continue to gain traction and interest from Asian investors.
The Deutsche Borse indexing arm has hired Rick Chau as new head of Asia-Pacific. Chau has an extensive track record in the index and asset management field. Based in Hong Kong he will lead the expansion of Stoxx franchise in Asia-Pacific, reporting to Roberto Lazzarotto, global head of sales at Stoxx.
Prior to joining Stoxx, Chau worked at MSCI where he was head of exchanges, Asia Pacific & head of index coverage, Hong Kong (sell side/hedge funds) & Taiwan, since 2010. Chau joined MSCI from FTSE Group where he was head of index sales and business development for North Asia (Hong Kong, Taiwan and Korea), in Hong Kong, for two years. He was previously national key accounts manager at Lehman Brothers in Australia.
Stoxx remains the leading index provider in the retail structured products market globally with over 21,000 products featuring Stoxx indices across jurisdictions worth an estimated US$2.2bn, in 2016, according to SRP data. Year to date, over 17,000 products are linked to Stoxx indices with an estimated value of US$1.8bn.
Excluding the Eurostoxx 50 benchmark, a total of 69 Stoxx indices have been used as underlyings for structured products over the past 3.5-years. Between them, the top five indices have been used in nearly 8,000 products to date, including just under 1,000 tranches so far in 2017.
The index provider has increased its presence in the region over the last few years and its Eurostoxx 50 index is now one of the three most utilised gauges in baskets of indices alongside the Hang Seng Index and the S&P 500 index. The Eurostoxx 50 index appears in over 4,000 products worth an estimated US$10bn, year to date.
In addition, as reported earlier this year, knockout products linked to the Eurostoxx 50 have returned around US$10.8bn to the global market, as the European benchmark has maintained its level, according to SRP data.
The current push follows the opening of a new office in Hong Kong in June 2017, after the index provider licensed the iStoxx Asia Pacific Quality Dividend Index to Yuanta Securities Investment Trust Company in March, a product that raised more than US$100m, in its initial weeks of subscription, suggesting there's appetite for smart beta strategies from local investors.
Other recent developments in the region for Stoxx include deals with Mirae Asset Global Investments and Korea Investment & Securities for an exchange-trade note (ETN), while in Japan, Stoxx signed a MOU with Mitsubishi UFJ Trust and Banking Corp. (MUTB) and licensed its iStoxx MUTB Japan Quality 150 Index to Mitsubishi UFJ Kokusai Asset Management (MUKAM) to underlie a passive index fund.
Stoxx has already co-developed six index concepts together with Mitsubishi UFJ Trust and Banking Corp. (MUTB). In July 2016 Stoxx, Yuanta and MUTB had signed a memorandum of understanding to expand the smart beta footprint in Taiwan and beyond.
'Working with local partners helps us to understand precisely the expectations of regional investors when creating new concepts,' said Matteo Andreetto, chief executive officer, Stoxx Limited. 'Our expertise in factor and thematic strategies allow us to address the rising sophistication among Asian investors looking to diversify beyond the traditional country exposure indices.'
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