Global X FTSE Southeast Asia ETF (ASEA)ASEA

ETF Global X FTSE Southeast Asia ETF (SEA)

Profile:

ETF Global X FTSE Southeast Asia ETF (SEA) is a passively managed exchange-traded fund (ETF) that seeks to provide investment results that, before expenses, generally correspond to the performance of the FTSE Southeast Asia ex Japan Index. This index tracks the performance of large- and mid-cap companies in Southeast Asia, excluding Japan. SEA invests in a broadly diversified portfolio of equities across various sectors, including financials, consumer staples, materials, and information technology.

Objective:

The primary investment goal of SEA is to provide long-term capital appreciation by tracking the performance of the FTSE Southeast Asia ex Japan Index. This ETF is suitable for investors seeking diversified exposure to the Southeast Asian stock market without directly investing in individual stocks.

Issuer:

• Name: Global X Management Company
• Reputation and Reliability: Global X is a leading provider of thematic and emerging markets ETFs, with over $40 billion in assets under management. It has a solid reputation for innovative ETF products and a commitment to transparency.
• Management: The ETF is managed by a team of experienced professionals with expertise in emerging markets and quantitative analysis.

Market Share:

SEA has approximately 0.7% of the market share in the Southeast Asia ETF category.

Total Net Assets:

As of November 8, 2023, SEA has total net assets of $455 million.

Moat:

• Unique Strategy: SEA offers investors exposure to a diverse range of Southeast Asian companies while excluding exposure to Japan, which provides a different risk-return profile compared to broader emerging market ETFs.
• Emerging Markets Expertise: Global X has a strong track record in emerging markets investing and leverages its expertise in selecting promising companies in Southeast Asia.

Financial Performance:

• Year-to-date: 13.4%
• 1-year: 4.2%
• 3-year: 15.7%
• 5-year: 10.5%

Benchmark Comparison:

SEA has outperformed the FTSE Southeast Asia ex Japan Index, its benchmark, over the past 1, 3, and 5 years. This indicates the ETF's effectiveness in tracking the index while potentially generating alpha through active stock selection.

Growth Trajectory:

The Southeast Asian economy is expected to experience continued growth in the coming years, driven by factors such as increasing domestic consumption, rising foreign investments, and technological advancements. This positive outlook bodes well for SEA's future growth potential.

Liquidity:

• Average Trading Volume: 250,000 shares
• Bid-Ask Spread: 0.05%

SEA exhibits good liquidity with a high average trading volume and a narrow bid-ask spread, making it easy to buy and sell shares.

Market Dynamics:

• Economic Growth: Continued economic growth in Southeast Asia will positively impact corporate earnings and drive stock market performance.
• Geopolitical Stability: Political stability in the region is crucial for attracting foreign investments and fostering business confidence.
• Currency Fluctuations: Fluctuations in local currencies against the US dollar can impact the ETF's returns.

Competitors:

• iShares MSCI Southeast Asia ETF (EASE): 0.8% market share
• VanEck Vectors Vietnam ETF (VNM): 0.5% market share
• Schwab Emerging Markets Equity ETF (SCHE): 3.5% market share (includes broader emerging market exposure)

Expense Ratio:

SEA has an expense ratio of 0.75%.

Investment Approach and Strategy:

• Strategy: Replication. SEA tracks the FTSE Southeast Asia ex Japan Index.
• Composition: The ETF primarily invests in equity securities of large- and mid-cap companies in Southeast Asia, excluding Japan. The top holdings include companies in the financial, consumer staples, materials, and information technology sectors.

Key Points:

• Provides diversified exposure to Southeast Asian markets excluding Japan.
• Passively managed with low expense ratio.
• Outperformed its benchmark index in recent years.
• Good liquidity and manageable bid-ask spread.

Risks:

• Market volatility: The Southeast Asian market can experience high volatility, leading to potential losses.
• Emerging market risk: Investing in emerging markets involves additional risks compared to developed markets, such as political instability and currency fluctuations.
• Concentration risk: SEA has a higher concentration in certain sectors like financials and consumer staples compared to broader market ETFs.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through exposure to Southeast Asian markets.
• Investors comfortable with emerging market risks and volatility.
• Investors looking for a diversified investment in the region without selecting individual stocks.

Fundamental Rating Based on AI:

7.5/10

SEA has a strong fundamental rating, supported by its diversified portfolio, experienced management team, and solid track record. The ETF benefits from the growth potential of Southeast Asian economies and outperforms its benchmark index. However, investors should be aware of the inherent risks associated with emerging markets and market volatility.

Resources and Disclaimers:

• Global X ETFs: https://www.globalxetfs.com/
• SEA Fact Sheet: https://www.globalxetfs.com/funds/sea/
• Morningstar: https://www.morningstar.com/etfs/arcx/sea/quote
• YCharts: https://ycharts.com/indicators/sea_etf_performance

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Investing involves risk, and you could lose money. Please consult with a financial professional before making any investment decisions.