A recent study last year showed more than 250 Asia ETFs only in the Asian-Pacific market with total assets about $70 billion. Countries included in this region are Japan, Malaysia, Indonesia, Thailand, Singapore, Hong Kong and the very much deserved China.
ETFs are somewhat new to the region, so the increase in double figures year after year since 2008 (as reported by iShares of Barclays Global Investors and State Street Global Advisors)is not a huge surprise. And the reason for it? As one can imagine the low expense ratio of these investment products which can be up to 10 times smaller than those of actively managed funds.
The Asian stock markets are suitable for both retail and institutional investors because of the flexibility of investment strategies they provide. These investors can also have exposure to this growth by accessing the various Asia ETFs there are on offer. Since the introduction of exchange traded funds investing in the emerging economies like Singapore, Japan and Malaysia ( alongside with huge players like China and Japan) is more accessible than ever.
However the Asian market is not only limited to the Asia Pacific region, emerging economies of India and Russia are also playing a key role in the market development. India rising high with a growth rate of 8.4% projected for 2011 is part of the new industrialized Asia. It launched the first fundamental ETF earlier this year as a mid-cap ETF. It tracks the 110-stock CNX Index which has around 20% financials that shows the country’s small banks and finance institution’s performance. It is growing to be the second largest equity ETF for the country.
Some of the largest Asia ETFs include the iShares MSCI FTSE/Xinhua China 25 Index, iShares MSCI Hong Kong Index Fund, the iShares MSCI Malaysia Index, iShares MSCI Singapore Index Fund, Market Vectors Indonesia Index ETF and the iShares MSCI South Korea Index.
Investments in Asia have evolved over the past years. Japan was once the host of the foreign investors and had a leading share in the the regional stock markets. Although Japan is still one of the world’s leading economies, much of the attention is not focused on Chinese, Indian and other Asia Pacific countries.
Some of the Asia ETFs that focus on Asian economies are-
- BLDRS Asia 50 ADR Index ETF (ADRA)
- First Trust ISE Chindia Index Fund (FNI)
- FTSE RAFI Asia Pacific ex-Japan Portfolio ETF (PAF)
- Global X FTSE ASEAN 40 ETF (ASEA) NEW!
- iShares FTSE EPRA/NAREIT Asia Index Fund (IFAS)
- iShares MSCI All Country Asia ex Japan Index Fund (AAXJ)
- iShares S&P Asia 50 Index Fund (AIA)
- MSCI Far East Financials Sector Index Fund (FEFN)
- ProShares Ultra MSCI Pacific ex-Japan ETF (UXJ)
- ProShares UltraShort MSCI Pacific ex-Japan Index Fund (JPX)
- SPDR S&P Emerging Asia Pacific ETF (GMF)
- Vanguard Pacific ETF (VPL)
- WisdomTree Pacific ex-Japan High-Yielding Equity Fund (DNH)
- WisdomTree Pacific ex-Japan Total Dividend Fund (DND)
- iShares MSCI Pacific ex-Japan Index Fund (EPP) Top 100
- iShares DJ Asia Pacific Fund (IAPD-LSE)
- iShares FTSE EPRA/NAREIT Asia Property Yield Fund (IASP-LSE)
- iShares MSCI AC Far East ex-Japan Fund (IFFF-LSE)
- iShares MSCI AC Far East ex-Japan Small Cap Fund (ISFE-LSE)