KUALA LUMPUR (April 11): Trading interest in Malaysia-focused exchange-traded funds (ETFs) picked up significantly in March, their combined value traded higher by 290% to RM1.08 million, compared to RM278,000 in February, and amounting to a market share of 13.9% versus 5.5% in February, said Bursa Digital Research.

“Within the segment, FBMKLCI-EA’s total volume/value traded jumped 305%/292% month-on-month (m-o-m) respectively to 309,000 units/RM461,000 from a 11-month low in February, which contributed to 43% of the Malaysia-focused ETFs’ total value traded,” said the research portal by Bursa Malaysia in its ETF Performance Report on March.

Bursa Digital Research observed that trading activities in the ETF space rebounded in March (volume: 3.81 million units, value: RM7.77 million) from its six-month low in February (volume: 1.88 million units, value: RM5.08 million), taking the total year-to-date (YTD) volume/value traded to 52.95 million units/RM70.49 million.

“March’s trading activities were 34%/12% higher than the six-month average monthly volume/value traded (excluding direct business transaction) of 2.85 million units/RM6.95 million which partly attributed to the additional trading days (March: 23 days, Feb: 18 days),” it said.

The research portal said GOLDETF has dominated trading activities in the ETFs sector in March.

“Led by the sharp rebound in gold prices in March, GOLDETF saw total volume/value traded jump by 159%/176% m-o-m to its 12-months high at 1.05 million units/RM2.86 million, contributing 37% (Feb: 20%) to the ETF market’s overall traded value in March,” Bursa Digital Research said.

“The yellow metal’s prices skyrocketed to its highest level since March 2022 amid lower US Treasury yield and softening of the US dollar despite another 25 basis points rate hike by the US Federal Reserves. The turmoil in the US regional banking sector also led to a flight to safe haven assets like gold.”

In its ETF fund flow highlight, Bursa Digital Research said local institutional inflows strengthened 248% m-o-m to RM1.19 million in March, extending their net buying interest for the fifth consecutive months.

“Inflows were mainly led by net purchase in GOLDETF (RM2.26 million) which offset net disposal by local retailers (-RM1.76 million). On a YTD basis, local institutions remained as the only net buyers of the ETF in Malaysia at RM54.22 million,” it said.

Besides that, the research portal said combined asset under management (AUM) in March was up by 1.1% m-o-m to RM2.18 billion, the highest in 26 months, primarily led by commodity and equity ETFs.

“AUM of GOLDETF rose 7.5% m-o-m to RM59.9 million on the back of improvement in yellow metal prices which lifted its net asset value,” Bursa Digital Research said.