We often hear from clients that they love certain Asia strategies, but have to resort to ETFs traded in the US or Europe due to ETF liquidity considerations. But what they really mean, is not the ETF liquidity itself, but rather the cost of liquidity that investors are worried about. Liquidity is a proxy for cost – the less liquid something is the more it’ll cost to get in and out, particularly during crises or market dislocations where whatever liquidity exists can go to 0. While a lot of investors trade Asian risk in the US and Europe, thinking that it is cheaper and more efficient where the ETF liquidity is, that is actually not the full picture. In this webinar, we would like to share with you a series of comparisons for a niche market, Vietnam, across ETFs listed in NY, London and HK.

Mar 10, 2020

Most investors assume that the more liquid the ETF, the easier and cheaper it is to trade. This is true in markets like the US, where on-screen liquidity is prevalent, but Asia markets are not as straightforward. China A ETFs with on-screen liquidity are easy to trade, but easier does not always mean cheaper to trade. There is market risk in trading on-screen and though it is easier, it can actually be more expensive than trading via the underling liquidity of China A stocks inside the ETF.

May 16, 2019