State Street Corporation's latest Vision Focus report found the Asia-Pacific (ex-Japan) region's ETF market increased its assets under management (AUM) by more than 40% in 2009, and is expected to continue to expand at this rate during 2010.

Sammy Yip, head of ETFs, Asia Pacific, at State Street Global Advisors, said: "ETFs are now an important part of Asia-Pacific's financial landscape, and the market is evolving rapidly. ETF assets in this region have grown by an annual average of more than 40% over the past several years, and I expect that level of growth to continue this year and beyond."

The report showed that ETFs in Asia are at an earlier stage of development to those in the US and Europe, currently accounting for $62bn in AUM in the Asia-Pacific region as of 30 October 2009, compared with just under $1 trillion in AUM globally. Hong Kong is the region's biggest market outside of Japan with $18bn in AUM.

It found that regulations on local ownership in some Asia-Pacific markets are to blame for the disparity, with restricted offerings and curbed liquidity in some parts of the region.