KUALA LUMPUR (Feb 8): The ABF Msia Bond Index Fund (ABFMY1) was the most active ETF in January 2023 in volume and value as 45.11 million units worth RM52.56 million were traded for the month, according to Bursa Digital Research's ETF Performance Report released on Tuesday (Feb 7).

Tradeplus S&P New China TrackerMYR (CHINAETF-MYR) was the second-most active ETF by value in January 2023 with RM1.24 million traded, followed by Tradeplus Shariah Gold Tracker (GOLDETF) at RM1.15 million, VP-DJ Shariah China A-Shares 100 ETF – MYR (CHINA100-MYR) at RM850,949 and TradePlus NYSE FANG+ Daily 2X Leveraged Tracker (FANG-2XL) at RM630,765.

On most active ETF by volume in January 2023, CHINA100-MYR was at the second spot with 607,600 units, followed by Gold ETF at 444,200 units, FTSE Bursa Malaysia KLCI ETF (FBMKLCI-EA) at 239,200 units and CHINAETF-MYR at 226,990 units.

The traded value and volume of these ETFs included both market transaction and direct business transaction.

Bursa Digital Research said trading activities in the ETF space have spiked to the highest level since August 2021 with total volume traded jumping over 10-fold month-on-month (m-o-m) to 47.27 million units, while total value traded surged over fivefold m-o-m to RM57.63 million in January 2023.

“The m-o-m improvement was mainly led by ABFMY1 where 45 million units worth RM52.43 million were traded via direct business transaction on Jan 16, making it the most traded ETF by volume and value for the month,” it said.

However, it said total market volume traded (excluding direct business transaction) moderated by 40.2% m-o-m to 2.27 million units, while total market value traded eased by 39% to RM5.21 million after three consecutive months of growth.

Bursa Digital Research said trading interest in China-themed ETFs remained subdued despite a rally in China equities on hopes of economic recovery as the country eased Covid-19 restrictions and reopened borders.

“The six China-centric ETFs saw their combined value traded moderate by 24% m-o-m to RM2.32 million in January (December 2022: RM3.05 million). Within this theme, CHINAETF-MYR and CHINA100-MYR contributed to 90.5% of the China-focused ETFs’ total value traded,” it said.

It added that trading activities in GOLDETF, which was one of the top traded ETFs, cooled down in January 2023 despite the rebound in gold prices since late November 2022 or early December 2022 amid lower US Treasury yield and weakening US dollar.

Total volume for GOLDETF shrank 37% m-o-m to 444,200 units while value traded declined 34.9% m-o-m to RM1.15 million in January as investors turn cautious ahead of the next Fed meeting on possible rate hikes, it explained.

In its fund flow highlight, Bursa Digital Research said local nominees net sold ETFs for the second consecutive month, with outflows intensifying m-o-m to RM52.34 million in January 2023 (Dec 2022: -RM0.07 million).

“Specifically, the disposal of ABFMY1 was worth RM52.31 million. It was absorbed by local institutions which added RM52.34 million of the fixed income ETF to their portfolios. With the net purchase of ABFMY1, local institutions extended their net buying interest for the third consecutive month and emerged to become the largest net buyers of ETFs in January (RM52.68 million),” it said.