As global market participants seek new avenues for growth and diversification, ASEAN markets have become an increasingly important focus. The region boasts a combined GDP of over $3.6 trillion and is projected to be the fourth-largest economy in the world by 2030[1]. With strong demographic trends, rapid digitalization, and growing foreign investment, ASEAN presents a compelling opportunity.
Yet, despite its potential, investing in ASEAN remains complex. Markets vary in size, liquidity, and regulatory frameworks, making broad exposure critical for effective portfolio construction. The FT Wilshire Hang Seng ASEAN Index offers a comprehensive benchmark for navigating these markets, capturing ASEAN companies across mega, mid, and small caps in both developed economy (i.e., Singapore) and emerging economies (namely Indonesia, Malaysia, Philippines and Thailand).
ASEAN’s Growth Story: Key Drivers for Investment
Several structural factors are fueling ASEAN’s long-term economic expansion:
- Demographic Advantage and Rising Consumer Demand
ASEAN is home to over 680 million people, with a median age of just 30 years[2]. This young, growing workforce is driving an expansion of the middle class, which is expected to double to 334 million by 2030[3]. As household incomes rise, demand for financial services, consumer goods, real estate, and healthcare is accelerating.
- Digital Transformation and Technological Growth
ASEAN is one of the world’s fastest-growing digital economies. Internet penetration has reached 75%, and e-commerce sales are projected to exceed $300 billion by 2025, up from $100 billion in 2019[4]. Investment in fintech, cloud computing, and digital payments is expanding financial inclusion, creating new market opportunities for global market participants.
- Infrastructure and Urbanization as Economic Catalysts
Governments in the region are prioritizing infrastructure spending, with initiatives such as Indonesia’s $33 billion new capital city project and Thailand’s Eastern Economic Corridor (EEC) attracting foreign investment[5]. This infrastructure boom is expected to increase demand for real estate, industrials, and energy, sectors that together represent nearly 25% of the FT Wilshire Hang Seng ASEAN Index.
- Regional Trade Agreements and Foreign Direct Investment
ASEAN has strengthened its position as a global manufacturing and trade hub, benefiting from shifts in supply chains as companies seek to diversify beyond China. The Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade pact, is expected to boost intra-ASEAN trade by $500 billion annually by 2030[6]. This has led to increased foreign direct investment, particularly in technology, energy, and transportation.
How the FT Wilshire Hang Seng ASEAN Index Captures These Opportunities
To navigate ASEAN’s evolving landscape, a broad, diversified approach is essential. The FT Wilshire Hang Seng ASEAN Index provides exposure to 314companies across five key ASEAN markets, capturing 98% of Singapore’s investable market and 93% of other ASEAN markets by full market capitalization.
- Sectoral Exposure Reflects ASEAN’s Growth Trends:
- Financials (40.9%): Benefiting from rising household wealth and digital banking adoption.
- Real Estate (10.7%): Supported by infrastructure expansion and urbanization.
- Technology (3.9%): Capturing the region’s digital transformation
- Market Breakdown Offers Balanced Regional Allocation:
- Singapore (35.1%): ASEAN’s financial hub, home to global investment capital.
- Indonesia (18.1%): Strong consumer growth and resource-driven expansion.
- Malaysia (19.7%): Key player in technology and renewable energy investment.
- Thailand (19.6%): Manufacturing and logistics leader in ASEAN supply chains.
- Philippines (7.3%): Growing demand for infrastructure and digital services.
Navigating Risks, Capturing Opportunity
Like any emerging market, ASEAN comes with risks, including currency fluctuations, geopolitical shifts, and market liquidity considerations. However, long-term economic fundamentals remain compelling, and market participants are increasingly seeking index-based strategies to gain diversified exposure while mitigating single-market risks.
Discover the newly launched FT Wilshire Hang Seng ASEAN Index - designed to capture ASEAN’s long-term growth potential with a disciplined, research-backed methodology. For more information contact us.
[1] McKinsey& Company. Asia's Economic Growth Trajectory.
[2] WorldBank. Population, Total - East Asia & Pacific.
[3] WorldEconomic Forum. The Rise of the Asian Middle Class.
[4] Google,Temasek, Bain & Company. e-Conomy SEA 2023 Report
[5] AsianDevelopment Bank. Indonesia's New Capital City Project Gets $33 Billion Boost.
[6] OECD.Regional Comprehensive Economic Partnership (RCEP).
