When Kevin Hardy assumed the role of BlackRock’s country head for Singapore two years ago, he told the media that he was disappointed with the pace of growth of the local retail exchange-traded fund (ETF) market. Two years on, it seems that little has changed. Singapore-listed ETFs had total assets of US$1.5 billion as at end-August, which is less than 1% of the combined assets of ETFs listed in Asia-Pacific. In fact, assets held by Singapore-listed ETFs have declined slightly from US$1.7 billion in October 2013, according to Deutsche Bank’s Asia-Pac Monthly ETF Insights.

Within Asia-Pacific, Japan-listed ETFs have total assets of US$122 billion ($173.2 billion), making it the largest ETF market by far. Trailing behind are China (US$36 billion), Hong Kong (US$36 billion) and South Korea (US$17 billion). And, the numbers are getting bigger all the time. According to ETFGI.com, assets held by ETFs globally have grown at an annual compound rate of 21% over the past decade. As at end-August, they stood at US$2.9 trillion.

Hardy says he has been actively engaging the Monetary Authority of Singapore and Singapore Exchange to help find ways to overcome hurdles to ETF growth here. Among the biggest challenges are the lack of both investors’ awareness and incentives in the distribution channels. But he adds that steady progress is being made. “By nature, the whole financial services ecosystem, particularly regulations, doesn’t move very quickly,” he tells The Edge Singapore in a recent interview.

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