Leveraged and inverse ETFs allow investors to profit from, and limit their exposure to, downward moving markets. They are also known as ‘ultra-soft’ funds and are put in place to try and achieve a return that is a multiple of the inverse performance of the underlying index.
The partnership sees Samsung appointed as Affin’s investment adviser in the management of Malaysian ETFs’ derivatives.
Similar story to Korea
Chee Wai Teng, managing director of Affin Hwang, explained that the partnership came about as “Samsung was the first asset management firm in the region to launch futures-based ETFs in Asia, and has been managing L&I products since 2009″.
Jaekyu Bae, investment officer and executive vice president at Samsung AM, added: “When first introduced in Korea in 2009, leveraged and inverse products acted as a catalyst for the growth of the overall ETF market, with renewed interest from both retail and institutional segments for ETFs.
“We hope to achieve the same in Malaysia. The timing of this partnership is also prescient with the recent introduction by the Securities Commission Malaysia (SC) of a new ETF framework which will pave the way for a broader range of ETF offerings beyond plain-vanilla products.
“This would bolster growth for the industry by stimulating demand and attracting greater investor participation,” Bae said.