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Perspectives: Mapping the future of Asia’s ETF market
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Ding Chen, CEO, CSOP Asset Management, joins Oliver Kadhim, Head of the Institutional Client Group, Asia, HSBC, on our latest podcast episode to delve into what’s driving the momentum in Asia’s ETF market and the risks associated with this change.
This episode was recorded on 14 October 2025.
Disclaimer: Views of external guest speakers do not represent those of HSBC.
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Transcript
Introduction to HSBC Global Viewpoint podcast
00:00:00
Speaker
Welcome to HSBC Global Viewpoint, the podcast series that brings together business leaders and industry experts to explore the latest global insights, trends, and opportunities.
00:00:12
Speaker
Make sure you're subscribed to stay up to date with new episodes. Thanks for listening, and now onto to today's show.
ETFs Introduction by Oliver Kadim
00:00:23
Speaker
Welcome to the latest edition of the Global Viewpoint. My name is Oliver Kadim. I am head of institutional client group here in Hong Kong for Asia at HSBC.
00:00:34
Speaker
And today on Global Viewpoint, I'm absolutely thrilled to be joined by Miss Ding Chen, where we're going to go and spend the next half an hour delving into the world of ETFs and everything that goes with it. Welcome.
00:00:47
Speaker
Thank you.
Growth of ETFs in Asia
00:00:48
Speaker
Today is all about ETFs. And there's no better person to spend time with talking about ETFs than you because you are on the road 365 days of the year, literally talking about and and telling the market what they think they need. and Let's start on that point. So the ETF growth story in Asia. Here we are sitting here in the last half of 2025. How has been for ETFs? Thanks, Olin. It's really a pleasure you know to be here ah to talk with our friend.
00:01:21
Speaker
So I think for 2025 in Asia ETF space, the most notable thing I need to mention is China ETF markets.
00:01:33
Speaker
So you just probably know, at August, China, the AUM of China ETS surpassed 5 trillion RMB, which is the historical high and also is a great, you know, very significant milestone.
00:01:52
Speaker
You know, it only took them four months to reach the 5 trillion. Hello? Hello? Four months. it Four months? Yes. To hit five trillion? Five trillion. So you know how long it took the industry to reach the first one trillion?
00:02:08
Speaker
How long? 16 years. Wow. At the same time, I just heard that in the U.S., there are now more ETFs than there are single stocks. Exactly. exactly it takes So it's taken four months to get to 5 trillion renminbi. Yes, from 4 trillion to 5 trillion.
00:02:25
Speaker
In four months. In four months. Wow. So the first 1 trillion took the industry 16 years. And this second the third the the second trillion took them three years.
00:02:36
Speaker
ah Since then, you know, the the market begins to boom and a lot of participants getting in AOM grows. And I think, you know, the for for this year, the $5 trillion is very important and also significant.
Hong Kong’s ETF Market Success
00:02:50
Speaker
It's also because China has a boom market for this a year.
00:02:56
Speaker
And also Hong Kong, itself for ETF House, it's also a very good year. So for Hong Kong ETF, the market total size you know or cannot compare with China. and Hong Kong is still, ah you know although it's an international financial center, but the market size is smaller than China. But right now, at the end of the third quarter of this year, the total AUM reached to 718 billion. like 100 billion US dollars.
00:03:24
Speaker
<unk>s roughly like ah a hundred billion hundred u s dollars Yeah, it's like the ETF market in a Hong Kong, 100 billion US dollars. Yeah, Hong Kong, 100 billion US dollars. It's roughly like a 20% increase of this year.
00:03:38
Speaker
And so for CSOP, it's also a very good year of 2025. So our CSOP's AUM is reached...
00:03:49
Speaker
$29 billion US dollar and it's also, you know, Maka's the second largest ETF house in the town. And also, you know, we have a significant cash inflow into the ETF products.
Regional Dynamics and Southbound Inflows
00:04:06
Speaker
gone Roughly, by end of the third quarter, we have $23 billion Hong Kong dollars inflow into our 20 billion Hong Kong, so what's that, almost 2.5, 3 billion US dollars inflows in Q3. inflows in Q3. For this year. For this year. For this And most of that's coming southbound, as in it's coming Yes. A lot them... Well, I had that number. Yeah, a lot of them come from South By, also from regional.
00:04:36
Speaker
So we can see a lot of our flows coming, and also the markets began to perform. So I also I think it's ah it's not a short term, but also it's a long term.
00:04:48
Speaker
We will see, you know, this sort of ah ETF space will have a golden of time to grow. As you told me since I've been in Hong Kong, where this town is based on momentum, but it was on that doorstep to China and I hadn't seen it. over the last four years, but 2025 has been that year with various catalysts along the way. And obviously, DeepSeek being a big part of that for the HS tech moves. And and just made everyone realize how cheap cover a lot of those names were. you say' We've touched on Hong Kong. I know you live on a plane as well. um As far as that Asia Middle East corridor, and that was, when did we do the um Saudi
Enhancing the Asia-Middle East ETF Corridor
00:05:28
Speaker
ETF? When was that? The 23? 2020 is three. 2023. Yes. so that was our co-parenting. Your co-parenting. Yes. Co-parenting in 2023 on the, ah that was when we had Hong Kong names listed on the Tadwa and Tadwa names listed here in Hong Kong in ETF. hu huh
00:05:44
Speaker
What are your plans for that Asia Middle East corridor going forward into 2026? Yeah, I think you know we will continue to build up these corridors to bring more ah interesting investment vehicles to Hong Kong and also to promote more of Hong Kong a market on Saudi and also GCC countries.
00:06:07
Speaker
So right now we see a lot of inquiry from ah our Middle East because everybody sees ah the Saudi ETF, the success story of Saudi ETFs.
00:06:17
Speaker
And they do see, you know, okay since the ETF launched ah Hong Kong Stock Exchange, And how we also ah bring this Saudi ETF cross-listing back to mainland China, both in Shenzhen and the Shanghai Star Exchange.
00:06:36
Speaker
They see, you know, continually cash inflow through this ETF cross-listing scheme to their capital markets. So I will see you know the from the Shanghai and the Sun-Zen Star Exchange, for this year we're gathering about $400 million US dollar new capitals to get into the Saudi markets.
00:06:59
Speaker
So a lot of ah GCC countries come to us and also try to copy the success of what CSOP did with PIS to bring ah Saudi
Future of ETF Offerings: AI and Thematic Investments
00:07:13
Speaker
ETF here. What about actually breaking down into the product? You said that HS Tech was the big one for this year for inflows.
00:07:20
Speaker
But with the move, it's not a huge surprise. springer What about for next year as far as where do you think that money is going to go and any new ones that you're working on or thematics that you think? Is it all going to be everyone chasing ai What's it going to be? Yeah, we we have, ah you know, quite a lot of of different projects to talk with different parties. But obviously, you know, try to bring more kids yeah to these families. Correct. So, yeah, we will we will see, you know, from tech, from fixed income side.
00:07:47
Speaker
But from my perspective is like ETF costs, we always provide. investors, the instruments, they can either do their strategic you know long-term pension planning and also we will provide them tools, allow them to do the tactical allocation, hedging their risks. And ETF, the Leverage Universe ETF, especially Universe ETF, gave them tools.
00:08:17
Speaker
In Hong Kong, because the past couple years, the bear market, so CSOP, we witnessed that in Hong Kong, the leveraging inverse product, the the first successful one is inverse one.
00:08:30
Speaker
That makes sense, right? People need to hedge their their risk, and gather a lot of AUM over there. So right now, it's like a very healthy environment for the leveraging inverse.
Tokenized Funds and Their Future Impact
00:08:42
Speaker
How about the future? Now, as we make that move into tokenized funds, where do you think we sit with that in 2026? Is that giving the clients what they want? no Or as always, know with CSOP, with csp are you creating a solution before the request is there? What are your views on tokenized funds?
00:09:02
Speaker
Yeah, I think tokenized funds will be the future. So the reason is because nowadays, if you look at people in their twenty early 20 years old, the young kids, they are all, you know how to say, they embrace the virtual virtual assets.
00:09:23
Speaker
they have um no high percentage of adoption rates of like a belt like the the the Bitcoin, tokenized things. So as ah after like 10 years, pretty much the majority of the retails, pretty much everybody will have their own wallets.
00:09:41
Speaker
So they'll have everything in there. So the tokenized funds will inevitably become a more and more popular things. And we see, you know, in the tokenizing ah or RWA, U.S. is the leading market.
00:09:57
Speaker
But Hong Kong, I think, in this region, Hong Kong is also leading the game as well. I couldn't agree more. and It's so nice to be sitting in the city, which is from a regulatory point of view, the exchange, no the tailwinds we have to develop these products, mean almost a test bed to see how that works.
ETFs as a Hedge in Volatile Markets
00:10:16
Speaker
um I know the we the big push on the amount of noise we've made this year, our topelized deposits, what that means to us.
00:10:23
Speaker
um Yes, I've never seen so much incoming from clients around digital asset solutions. So it's just, it's how things are going to be held in the future. And it's come about so quickly. Because, you know, you and I were not talking about this two years ago. Yeah. And here we are. What are you worried about then? So we've done everything which is positive and lots of blue sky. What are your concerns for 2026 from an ETF market point of view? Both of them.
00:10:49
Speaker
So, you know, actually, ah this is a very ah interesting market for 2025 globally. This is a global bull market for 2025, pretty much.
00:11:00
Speaker
And the people more and more talking, still people talking about, you know, uncertainties, people talking about geopolitical risk, people talking about, like, ah you know, coming...
00:11:13
Speaker
um the inflation ah possibilities, and also, you know, people more and more talking about AI bubbles. So probably, you know, in 2026, some ways somehow we are facing that risk though seriously.
00:11:33
Speaker
Recently, more and more people um come to ask me whether, you know, Ms. Dean, you will think there is AI bubble. So for the AI, they definitely can change our lifestyles, can give human beings more rooms to grow our society in a good way.
00:11:51
Speaker
But on the other on the other hand, um right now, too much capital is chasing technology. this sort of concept and will see some extreme case comes out.
00:12:04
Speaker
Normally they would say a crash can be avoided as long as risk can be transferred. With an ETF you can always buy it or you can always sell it. Yeah, exactly. Whereas I think there are a lot of other products out there that we're getting very excited about at the moment.
00:12:18
Speaker
Once again, if things could turn bad, how do you get out of it? If you look at ah the tech bubble, the internet bubble back to like 1999, something like that, if you miss the huge wave of the market, so the best way is you stay with the market and the ETF will be the best way you can stay in there.
00:12:41
Speaker
Because right now we cannot tell so which one will be the ultimate winner. but You have to have a basket. You have to have a basket of stocks. You have a basket. Which which is cheap to have cheap to run. Yeah. And the fees are not astronomical. Make it cost effective. But you're going to participate, which seems to me the theme yeah is I want to participate. How do I participate? Yes, exactly. so using ETF as a tool to participate this sort of big change or big movement for the human being.
00:13:09
Speaker
i think yeah I hate to say it, but can you believe it? We've run out of time already. we could Thank you so much for joining us today here on The Global Viewpoint. That means a lot to us. And thank you for all your insights.
00:13:20
Speaker
To everyone at home, thank you so much for tuning in. i hope you got as much out of this as I did. And we look forward to seeing you in the next one. Thank you for joining us at HSBC Global Viewpoint.
00:13:32
Speaker
We hope you enjoyed the discussion. Make sure you're subscribed to stay up to date with new episodes.