262. What Do ETFs in Asia Mean for Investors in Today’s Markets?
Web title: What Do ETFs in Asia Mean for Investors?
Full episode description:
ETFs in Asia have grown significantly since the global financial crisis, but their role is changing. What began as a way to access markets is now expanding into broader portfolio applications as investors face more complex market conditions.
In this episode of The Bid, Oscar Pulido speaks with Christian Obrist, Head of iShares Distribution in Asia, and Nick Peach, Head of iShares Asia Pacific at BlackRock. They discuss how ETF usage in the region has developed and how investors are applying them across different strategies.
The conversation explores how education has shifted from fundamentals to advanced use cases, including liquidity management, tactical allocation, and operational efficiency. It also highlights the role of digital investors, the importance of local market development, and how ETFs are becoming more integrated into portfolio construction.
Key insights:
How ETF usage in Asia has moved beyond market access
Why investor education is shifting toward advanced applications
Where ETFs are being used for liquidity and cash management
How digital investors are influencing ETF adoption
Why local market listings matter for ETF accessibility
How ETFs are becoming more integrated into portfolio construction
Keywords: ETFs Asia, iShares, ETF adoption, portfolio construction, Asia markets, digital investors, liquidity management, passive investing
Sources: BlackRock client Survey May 2026
Written Disclosures In Episode Description:
This content is for informational purposes only and is not an offer or a solicitation. Reliance upon information in this material is at the sole discretion of the listener. Reference to any company or investment strategy mentioned is for illustrative purposes only and not investment advice. For full disclosures, visit blackrock.com/corporate/compliance/bid-disclosures.
<<TRANSCRIPT>>
Oscar Pulido: ETFs have become more popular in Asia since the global financial crisis. But so far, the conversation has been about access. Now that conversation is shifting because across Asia, ETFs are no longer just entry points into markets. They're becoming tools investors are using to build portfolios, manage risk, and navigate increasingly complex conditions.
But as the market has matured, so have the expectations. Investors aren't just asking what ETFs are anymore. They're asking how to use them, where do they fit, and how can they use them to make better decisions in a landscape with more choice, more nuance, and more moving parts. So how has the ETF story in Asia evolved to meet that moment?
And what does that mean for global investors trying to put them to work today? Welcome to The Bid, where we break down what's happening in the markets and explore the forces changing the economy and finance. I'm Oscar Pulido. In this episode, we're coming to you from the iShares ETF certification event in Singapore, where the conversation around ETFs has clearly moved beyond the basics and into real-world applications.
I'm joined by Christian Obrist, head of iShares Distribution in Asia, and Nick Peach, head of iShares in the Asia Pacific region for BlackRock. We'll discuss how ETFs in Asia have evolved, what's driving their growing role in portfolios, and what investors need to understand as the markets become more sophisticated.
Christian and Nick, thank you so much for joining us on The Bid. Thank
Christian Obrist: Thank you, Oscar.
Nick Peach: It's great to be here. Thank you.
Oscar Pulido: Guys, we're in Singapore. The Bid is on the road. We're filming a few episodes, here in Asia, and talking about topics that are pertinent to the region. We recently spoke with Aarti Angara, where we talked about the growing role that Asia is playing in investor portfolios and the growth dynamics that we're seeing across countries.
Today we're going to talk about ETFs and the usage of ETFs by many investors in Asia. Maybe we can start with the big picture. I think the story goes that the first Asia ETF was launched in Japan in nineteen ninety-five, but that they only became popular after the global financial crisis. So Christian, perhaps I could start with you.
What's the most important investor behavior that has changed in Asia over that time period?
Christian Obrist: So, I got to the region in 2014, had just moved from, London to Hong Kong. And I think I missed the first version of ETF certification, sadly, but I made the second, and it was in Hong Kong. And I remember back then, ETFs while, yes, they had been around for a little while, they weren't heavily used.
They were not prominent in investor portfolios, and certainly that sort of broader adoption, was not really there. So, I remember a lot of the work we did, the, the first or second ETF certification was really teaching investors about the basics, really bottom-up education, due diligence, what is an index, how does an ETF trade, explain liquidity, et cetera, et cetera.
And I think over those, 10-12 years, the, the market has become a lot more sophisticated around ETFs. But it's transformed from really being peripheral to being really fully integrated into portfolios,
So, overall, just much more embedded and the conversation is obviously getting a lot more complex as well as the ETF wrapper has evolved and has moved from index only to being a wrapper for everything.
Oscar Pulido: So, it sounds Christian, there's been some education that you've been part of with investors in the region and in fact, the event that we're at here today is a continuation of that.
We have many investors from across Asia that are here to learn more about ETFs. But Nick, perhaps to come over to you, what are they learning about? If we've moved beyond the basics of ETF education, then what is that information that you're trying to convey to those investors today?
Nick Peach: When we think about investor education, one of the stats that I found very revealing is that for the event that we're hosting over these last two days, we always survey attendees ahead of the event, and one of the questions we ask is, What is your level of familiarity with ETFs? This year, 70% of our attendees said they either had a good understanding or an excellent understanding of ETFs. So, when we think about education and what people are trying to learn, it's definitely not 101. Arguably, it's not even 201, right? These are sort of master classes in specific use cases.
Oscar Pulido: The world is very dynamic these days. We spend a lot of time with our guests talking about AI and geopolitics, and that requires an ability to be nimble in portfolios. And I think what you're saying is that ETFs can play a central role in, in helping investors be nimble.
And Nick, you also mentioned that there's a lot of different ways in which ETFs can be used as portfolio tools, for different exposures to express different views. Maybe Christian, coming, back to you, what-- maybe expand a little bit more on that. I think you also mentioned, active ETF. So, it feels like we've moved well beyond that early education that you spent time doing when you first moved to the region.
Christian Obrist: Yeah, 100%, right? So back then it was much more of an access vehicle. You start with your sort of broad market index, much more convenient. And to pick up on what Nick was saying, it's moved from being convenient to, almost being needed, to steal Nick's words actually. And as we said, the product set has evolved.
It wraps so many more things than just index. active still nascent in the region but growing. and if we think of active, what is the use case? I was chatting to an investor, recently, and I was curious what that investor's real motivation was, and it was fairly simple.
It was all around operational efficiency You're taking the ETF wrapper, applying it to active, and we all know it's a mix, right? We got index, that, fits the bill for certain things, and active plays a role for other things. And for this investor, it was all about the alignment of settlement so that when they make switches, tactical adjustments in their asset allocation, that they're not out of the market, right?
in the mutual fund wrapper, typically you buy, let's say, T0, you sell depending on what the underlying exposure is, T plus four or f- five. With the ETF, you align those two things, and especially as we've, been talking about much quicker moving world, being out of the market, not really a great thing anymore. So, if you can help yourself by improving that o- operational efficiency, it just helps you be more effective as a PM.
Oscar Pulido: I think if you're an investor in the US or Europe or Asia and you're using ETFs, there are some commonalities about, reasons maybe you use the instrument. But Nick, maybe coming back to you, what's unique about the ecosystem in Asia as compared to the US and Europe?
Nick Peach: Sure. I think that the ecosystem in Asia is, as I mentioned earlier, I mentioned a stat earlier, it's growing incredibly quickly, right? And I think what you're seeing is that investors in Asia, much has happened in the rest of the world, are really starting to see the possibilities that are inherent in the ETF wrapper.
Previously, you would've said, the region is five to 10 years behind the US and Europe in terms of adoption of the wrapper. That gap is closing incredibly rapidly, and I am constantly surprised by how willing the investor base out here is to embrace the ETF wrapper, and all of the options that gives an investor. So, it's very encouraging to see.
Oscar Pulido: Nick, let me stay with you for a second. One of the topics that we've explored on The Bid is talking about investors who are, investing directly in the market and they're using, technology to do that. And given that we're in Asia, what comes to mind is India as one of those examples of a country where you have a very digitally native investor base and taking over their finances on their own.
Maybe talk a little bit about how is that changing the ETF story in Asia when you have this rise of the direct investor?
Nick Peach: Absolutely. I think if you were to look across the region, you would actually see the rise of the digital investor occurring in many of the markets that we have out here, and it is having a profound impact on the ecosystem.
I think if you think about the ETF, it is a more digitally accessible, wrapper for investment, than the other alternatives, which typically are a bit more analog, if you like. And so, if you look at the growth rates and you actually look at where that growth is coming from, what you'll see, whether it's Japan, Hong Kong, Singapore, Taiwan in particular, you're seeing a huge uptake. and it's actually becoming one of the driving forces for ETF adoption in the region, which again, to bust a myth perhaps, is that ETFs out here were largely institutional products previously, and they still are but by far the fastest growing segment that we see adopting the ETF is that direct investor.
Oscar Pulido: Christian, coming back to you, I mentioned that we spoke to Aarti Angara, earlier, in our trip, and we talked about how Asia is a very fragmented region. There's a lot of differences between countries that we all group together and say Asia Pacific.
But how does that fragmentation impact the ETF market? Does it impact the way an investor in Asia experiences the benefits of an ETF versus somebody in the US or Europe?
Christian Obrist: It's a good question, and you're right. So many different countries, many different regulatory systems, different currencies, that has led to the early adoption of ETFs, and it depends a little bit by market, but mostly meaning that these investors will go overseas and consume US products or the UCITS products from Europe. But as some of the local markets have grown, they provide more opportunities, more choice for investors.
But typically, it's still fairly locally centric, right? So, Japanese investors mainly will buy products listed in Japan, or you might get regional sort of specialization. In Hong Kong it might be the products are more China-focused. So, the unique thing that we see is that the investor base is consuming products from all over the world. Makes the job a little bit more interesting.
But it is changing, as I said, and what we just talked about before, this growth of the retail, end investor is prompting a lot more, issuance in these local markets. And I think as we see these local ecosystems grow, it just provides a much more, developed, ETF platform with more liquidity, certainly more choice and I think, a lot more investors adding to the whole sophistication of the marketplace here.
Nick Peach: And if I can just maybe add on top of that, because I think you've raised a great point, Christian, is we spoke about the rise of the direct segment and the advantages of the ETF wrapper. You can get real-time liquidity, but that's obviously only the case if the ETF is trading in the same time zone that you're in the same currency that live your life in.
And so, while there is still a huge amount of demand for global products, as Christian has said, it's really those direct investors who the way they realize the benefits of the ETF wrapper requires those wrappers to be listed locally, right? And that's where we really see a lot of this, a lot of this organic growth in the Asian markets.
Oscar Pulido: So, gentlemen, we've talked about a couple of things. We've talked about the expansion of usage of ETFs in Asia. We've talked about the rise of the direct or the retail investor. And Nick, you mentioned that what used to be one-on-one education sessions with investors are now, akin to getting a master's degree in ETFs.
In other words, people are getting more sophisticated about ETFs. So, both of you have had a front row seat to how this topic has evolved in Asia Pacific. What do the next couple chapters of this book look like? Nick, maybe start with you.
Nick Peach: Sure. And that's always just such a fun question to answer, right? I think that despite the growth we've seen, and despite all the innovation that we've seen in the wrapper, if you look at ETF usage in Asia compared to-- And by, by this individual ETF usage compared to the other regions, it's still very much the early innings. To use a, an example I heard earlier, in a sense, we're still singing the national anthem, so to speak, right?
So, you've seen tremendous growth, and what you've seen in terms of innovation, in terms of derivatives overlays, in terms of access to cryptocurrencies, to commodities, these are really showing people what is possible in the wrapper. But there's a lot of work to do, right? It's a very populous region. It's a very fragmented region. I think it's going to take time for that message to spread. That's one of the things I think is most exciting about Asia, is we are still very much in the early innings and there's so much more to do.
Christian Obrist: So, when we think about what's next for Asia, and ETFs, I think it's really the further penetration of ETFs into the portfolio, moving away from the periphery. And again, there's many use cases, but it's two, three, four, five percent. But being far more integrated into sort of total portfolio management. and we already see that. We have some very large users that we like to call super users that have completely transformed the way they manage. And it's, again, most of it has to do with that sort of internalizing of operational efficiency. Markets are moving quicker. You have to be nimble. You have to lower your transaction costs. And so, the ETF and the multitude of the sort of applications and use cases, and as education grows around this, we see this adoption rising far more from here.
Oscar Pulido: So, gentlemen, it's been great to talk about ETFs. I mentioned that The Bid is on the road, and actually, I have to spend the weekend in Asia because we are going to record a few of these episodes. I'll be spending it in Hong Kong and Tokyo. But I'm just curious, for two people who have lived in the region for a long time, where would you spend your weekend in the Asia Pacific region?
Christian Obrist: Look, I'm a big fan of Singapore. I actually partially grew up here, and Singapore is completely unique. You should go check out the Cloud Forest, right? It's one of the biggest indoor forests you'll find. The biggest, waterfall as well. So only Singapore can, can actually do these things. or the waterfall at the airport as well.
Nick Peach: I'm going to give you a portfolio builder answer and say you just can't go wrong in the region. It's one of the reasons I've lived out here for so long. Every place is so unique. It has so much going for it that's interesting. You're going to have a wonderful weekend in Hong Kong. I lived there for 15 years. There's so much to do. But really, I would say, you said you have to spend a weekend in Asia. I would say you get to spend a weekend in Asia
Oscar Pulido: That's right! Nick and Christian, thanks for sharing all these insights on ETFs and also for your views on great places to visit, in the region and thank you for sharing this on the Bid.
Nick Peach: Thank you, Oscar.
Christian Obrist: Thank you. It's been a pleasure.
Oscar Pulido: Thanks for listening to this episode of The Bid. Next up, we're looking at what infrastructure opportunities are opening up globally, and in Asia in particular. Subscribe to The Bid wherever you get your podcasts, and don't miss the episode.
<<SPOKEN DISCLOSURES>>
This content is for informational purposes only and is not an offer or a solicitation. Reliance upon information in this material is at the sole discretion of the listener. Reference to the names of each company mentioned is merely for explaining the investment strategy and should not be construed as investment advice or recommendation. For full disclosures, visit blackrock.com/corporate/compliance/bid-disclosures
MKTG0626-5511804-EXP0627
