To The Moon

Speaker: Ong Xun Xiang, Head of ETFs at Lion Global Investors, explains why Asia Pacific financials could be a source of both growth and dividends, what is driving banks across Japan, Korea, Singapore and beyond, and how one ETF packages that theme.

[About the Speaker] Ong Xun Xiang is Head of ETFs at Lion Global Investors, where he is responsible for building and commercialising the firm’s ETF business, including speaking at ETF events to share investment and industry knowledge with the public. He has worked across asset management, private banking and fintech. Before joining Lion Global Investors, he was a Capital Markets Assistant Vice-President at ADDX (formerly iSTOX), a MAS-licensed digital securities platform, and earlier an Assistant Vice-President in BNP Paribas Wealth Management’s Key Client Group, where he helped originate and manage private market investment opportunities for ultra-high-net-worth individuals. He holds a Bachelor of Accountancy from Nanyang Technological University and is a Chartered Financial Analyst (CFA), Chartered Alternative Investment Analyst (CAIA), Chartered Accountant (Singapore) and ASEAN CPA charterholder.

[The Hook] For many Singapore investors, “financials” means three local banks. Xun Xiang’s starting point was that the opportunity is much wider: compared with developed markets such as the US, Asia Pacific is where household wealth is growing fastest, and the financial institutions that sit at the centre of that wealth stretch well beyond Singapore. This is Part 2 of 4 from the seminar “Diversifying for Changing Markets: Financials, Bonds and Singapore’s Green Leaders”, held at the Tiger Brokers office on 27 October 2026.

[Why APAC? Wealth Is Growing Fastest Here]

• Faster growth: gross financial assets in Asia ex Japan ex China grew at a 9.0% CAGR over 2005 to 2024, versus 6.1% for the world (Allianz Global Wealth Report 2025).

• Recent momentum: from 2019 to 2024, real financial assets grew by 29% in Asia ex Japan ex China and by 56% in China, versus 14% in North America.

• Wealthy households: four of the world’s top ten wealthiest household markets (by gross financial assets per capita in 2024) are in APAC, including Singapore.

• Savings still sit in deposits: Asian households hold a large share of their financial assets in deposits (for example, 54.5% in China versus 11.7% in North America). The slides point out that this leaves room for money to move into fee-generating assets such as investments and insurance, which is a long-term opportunity for banks, insurers and wealth managers.

[Why APAC Financials? Four Themes]

• Reforms in Japan and Korea: the Bank of Japan’s rate hikes have taken its policy rate to 1.25%, the highest since 1995, lifting bank earnings. In Korea, the “Value-up” programme is pushing banks to return more capital through dividends and buybacks, with KB, Shinhan and Hana each targeting payout ratios of around 50% or higher.

• Solid, healthy banks: Singapore banks remain well-capitalised with attractive returns on equity (ROE), and Indonesian banking groups are among the most profitable in the region. In Japan, Sumitomo Mitsui Trust Group reported Q1 FY2026 net income growth of 56% year-on-year, and Nomura Holdings 39%.

• Long-term growth trends: insurance penetration across Asia remains low (Indonesia in particular), China wealth products now exceed about US$5 trillion in AUM, and Southeast Asia’s digital finance market is projected to reach US$1 trillion by 2030.

• Value and income: Asian bank stocks consistently offer some of the world’s highest dividend yields, and many trade at a valuation discount to US and European peers.

Learning point: why rate hikes can help banks. Xun Xiang explained that when interest rates rise, banks’ net interest margin (the gap between what they earn on loans and what they pay on deposits) can widen. That is part of why Japanese banks have benefited after years of near-zero rates. He added that earnings growth is not only about margins: investment banking and investment management income also contributed to the results shown.

[The ETF: Lion-OCBC Securities APAC Financials Dividend Plus ETF]

The ETF (SGX tickers YLD in SGD and YLU in USD) is described in the slides as the world’s first APAC Financials ETF. It gives diversified exposure to banks and insurers listed in Japan, Korea, Singapore, Hong Kong, Australia, Malaysia, Thailand and Indonesia, and aims to pay quarterly distributions (historically around 5% p.a. of the fund’s NAV, though distributions are not guaranteed).

• Valuation: the index trades at 1.3x price-to-book (P/B), compared with 5.6x for the US (S&P 500), 2.4x for Europe (Euro Stoxx 50) and 1.8x for both China (CSI 300) and Singapore (STI). P/B compares a share price with the company’s book value per share. A lower number is not automatically “better”, but it shows how the market is pricing these banks relative to others.

• Diversification: the ETF holds 30 financial institutions across the region.

• Income: dividends are supported by high-yielding banks across APAC.

• Index and costs: it tracks the iEdge APAC Financials Dividend Plus Index. The ETF was incepted on 13 May 2024, charges a management fee of 0.50% p.a., and had a fund size of S$154 million as at 30 September 2026.

• Built-in limits on concentration: weightings are capped at 7% per stock and 20% per country, with a 5% cap for Indonesia.

[Performance and Distributions: What the Slides Show]

The slide compares the ETF with the State Street Financial Select Sector SPDR ETF, a US financials ETF. Both give broad exposure to large financial-sector companies; the difference is that the Lion ETF provides exposure to APAC’s growth and wealth creation. As at 30 September 2026, the ETF’s total returns were 24.3% for 2026 YTD, 25.7% for 2025 and 27.4% annualised since inception, versus -1.4%, 14.9% and 12.5% for the US comparison ETF. The chart also marks the ETF’s quarterly distributions and two special distributions of 3.00 cents per unit. As the slide notes, past performance and distributions are not guaranteed indicators of the future.

[Q&A Spotlight: Why Keep Indonesia?]

After recent market moves, Xun Xiang said he received many questions about Indonesia. His answer was that the index keeps a position there, capped at 5%, so that the ETF retains exposure to a faster-growing market while limiting how much any single market can hurt the portfolio. It is a good example of how a weighting cap works in practice: it balances conviction with risk control.

[Key Takeaways]

• Wealth growth is regional. APAC leads on financial-asset growth, and households still hold a lot in deposits.

• Banks have different drivers in different countries. Japan’s rate cycle, Korea’s shareholder-return reforms and Southeast Asia’s growth runway are separate stories.

• Valuation and yield are two different lenses. P/B shows how a market prices book value; dividend yield shows cash returned, and neither is guaranteed.

• Caps manage concentration. Per-stock, per-country and Indonesia-specific limits shape what the ETF can hold.

[Call to Action 🎯]

1. Pick one APAC bank you know and look up its price-to-book ratio and dividend yield. How does it compare with a US bank?

2. Write down in your own words why higher interest rates can raise a bank’s net interest margin, and what could go wrong if rates fall.

3. Drop a comment: which APAC financial market (Japan, Korea, Singapore, Australia or Southeast Asia) would you most like to understand better?

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