Mirae Asset retreats from China-related ETFs

Global X, a subsidiary of Mirae Asset Global Investments, which manages exchange-traded funds (ETFs) in the U.S., recently decided to delist most of its Chinese ETFs to "ensure its product lineup meets the evolving needs of its clients."

According to Global X, Tuesday, 19 ETFs will be liquidated on Feb. 23. Out of these, 11 are tied to investments in Chinese corporations. The decision entails liquidating all but one of the 12 China-related ETFs issued by Global X.

Global X stated that liquidating the funds is in the "best interests" of the ETFs and their shareholders.

The 19 funds targeted for liquidation account for less than 1 percent of Global X ETFs' total assets.

Asset management firms often reshuffle their products in response to customer interest and market trends. Accordingly, the recent reorganization at Global X suggests a declining demand for products related to the Chinese market. Amid uncertainties about China's economic recovery, both the mainland and Hong Kong stock markets have shown consistent downward trends this year, resulting in a notable exodus of investors from China.

However, Mirae Asset Global Investments clarified that the removal of China-related ETFs from its current lineup does not rule out the possibility of developing new China ETFs in the future.

"The liquidation of small-scale funds by Global X includes 11 China-focused sector ETFs," a Mirae Asset Global Investments official said. "We are exploring the introduction of new ETFs focused on Asian markets, China included."

Meanwhile, market observers suggest that Mirae Asset Global Investments is well-positioned to establish a strong presence in the Indian market, which is emerging as a new focal point in the developing world's investment landscape. Hanwha Investment & Securities analyst Kim So-yeon noted, "If the focus was on the Chinese stock market in the 2000s, now it's time to buy India."

For years, the asset manager has been actively pursuing expansion in India. It marked its entry into the country in 2018, becoming the first Korean securities firm to do so, and has recently solidified its presence by acquiring Sharekhan, a local Indian brokerage. Notably, its Indian subsidiary is the sole independent foreign investment firm operating in India.

"India currently accounts for less than 5 percent of the global gross domestic product (GDP). However, with its strong consumer market and benefits from economic globalization and bloc formation, it is expected to emerge as one of the Big 3 nations in the global economy, following the U.S. and China," said Kim Nam-ki, executive director of Mirae Asset Global Investments' ETF management business unit.