Asset managers are set to launch exchange-traded funds (ETFs) based on the new S&P Nifty Futures Index of the Singapore Exchange (SGX) because of concerns about the risks related to swaps-based ETFs, Asian Investor reports. These managers are mainly focusing on the counterparty risk and delta-one trading following the $2.3 billion trading loss suffered by UBS. Other products providing similar access to other markets, such as through SGX FTSE China A50 futures, may also be launched in the market. The SGX is also preparing to unveil dynamically hedged strategies to offer volatility control and principal protection using SGX futures.
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