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Typically, whenever investors' minds think about investing in the Asia-Pacific region, their minds go to China -- and rightfully so. China is the world's second-largest economy, and as goes the Middle Kingdom, so goes the region and much of the rest of the world. But there's plenty of economic gunpowder across the Asia-Pacific, and investors can access everything from large bank dividends to global technology titans through a number of exchange-traded funds that vary from broad, diverse multinational offerings to targeted local plays. Here's a look at some of the best ETFs that invest in Asia-Pacific stocks.
SPDR S&P Emerging Asia Pacific ETF (GMF)
The GMF is one of a number of broad Asia ETFs that holds Chinese stocks prominently in the portfolio. Specifically, nearly 43 percent of this fund's 752 stocks are China-based, and the fund also is heavily weighted toward Taiwan (21 percent) and India (18 percent). The rest of GMF's stocks represent six other Asian countries. A full quarter of GMF is dedicated to tech stocks, including internet titan Tencent Holdings and e-commerce stock Alibaba Group Holding (BABA).
Expenses: 0.49 percent, or $49 annually for every $10,000 invested.
iShares MSCI Emerging Markets Asia (EEMA)
EEMA focuses on Asia's emerging markets, but results in a country list similar to GMF's. China enjoys a 36 percent weighting, while Taiwan (17 percent) and India (12 percent) also hold double-digit spots. However, fully 20 percent of the fund is invested in South Korean stocks, which are absent from SPDR's fund. IT is even more outsized in the EEMA, at more than 31 percent, and top holdings look very similar to GMF's, with a notable exception of Korea's Samsung Electronics at No. 2.
Expenses: 0.49 percent, which includes a 19-basis-point fee waiver.
iShares Edge MSCI Minimum Volatility Asia ex-Japan (AXJV)
A number of funds are dedicated toward tamping down volatility -- in this case, AXJV looks for a low-volatility solution for Asia. Interestingly, AXJV's goals don't result in country weightings that vary much from the other funds -- China, Taiwan and South Korea all have double-digit holdings. That said, the top tech holdings are less aggressive -- Nos. 1 and 2 are consulting and outsourcing firms Wipro (WIT) and Infosys (INFY) -- and the fund also has double-digit weightings in telecom, industrials and financials, the last of which leads AXJV at 24 percent.
Expenses: 0.35 percent
Global X Southeast Asia ETF (ASEA)
Anyone looking for a truly "emerging" holding that focuses on Asia should consider Global X's ASEA, which tunes out the more developed economies of China, South Korea and India. Instead, ASEA focuses on a tight 40-holding portfolio spread across just five countries: Singapore, Malaysia, Indonesia, Thailand and the Philippines. There's nothing balanced about this fund, with financials making up nearly half the fund and telecom almost 20 percent more. But ASEA enjoys a comparable beta to the other regional ETFs listed so far, and it actually sports the best one-year performance at -12 percent.
Expenses: 0.65 percent
iShares MSCI Japan ETF (EWJ)
You might've forgotten at this point, but Japan is part of Asia, too. However, the very developed economy is so dissimilar from the rest of the region that many broad Asia funds simply exclude Japan from their ranks. EWJ is the most popular way to get Japanese exposure, at nearly $15 billion in assets, and holds nearly 320 stocks at a fine sector blend that sees six of its 10 sectors weighted between 9 and 20 percent. Of note is top holding Toyota Motor Corp. (TM), which represents a full 5 percent of the fund.
Expenses: 0.48 percent
WisdomTree Japan Hedged Equity Fund (DXJ)
From 2012 through 2015, the Japanese government aggressively weakened the yen, which boosted the fortunes of the nation's companies -- in terms of local currency. But weak currencies actually hold back investors' returns in foreign stocks, and thus a weak yen actually blunted the gains in the EWJ for several years. The DXJ is the solution to the specific problem of strong stock returns and a weak yen, as it holds a host of export-heavy Japanese stocks -- like Toyota, Honda Motor Co. (HMC) and Nissan Motor Co. -- while simultaneously shorting the yen. Just take care: A resurgent yen has been murder for the DXJ this year.
Expenses: 0.48 percent
iShares MSCI South Korea Capped ETF (EWY)
South Korea, under pressure amid slowing economic growth and Brexit fears, is planning a stimulus budget to get things back on track. Primed to benefit is the EWY -- a 108-stock fund that would be a lot more balanced if it were 107. Samsung, worth $175 billion based on market capitalization, makes up a laughable 22 percent of EWY thanks to its cap-weighted methodology. Hyundai Motor Co. is second at a mere 3.4 percent. Naturally, this bloats EWY's technology weight, which stands at 36 percent, and no other sector accounts for as much as the fund as Samsung.
Expenses: 0.62 percent
iShares MSCI Taiwan ETF (EWT)
Tiny Taiwan is actually a large economic fish that resides in the top 20 of many global rankings. But what was an industry-heavy economy has shifted into a tech-dependent one -- something reflected in EWT's utterly lopsided 58 percent sector weight in information technology. Like EWY, EWT also features an 800-pound gorilla in the form of $130 billion chipmaker Taiwan Semiconductor Manufacturing Co. (TSM), which makes up nearly a quarter of the fund. The only other sectors that are strongly represented are financials at 16 percent, and materials at 9 percent.
Expenses: 0.62 percent
iShares MSCI Australia ETF (EWA)
Australia itself is a weird, isolated bird that finds itself in few regional ETFs because ... well, it's basically its own region. That said, it does appear prominently in many international dividend funds, thanks in large part because of high-yielding financials such as Commonwealth Bank of Australia -- EWA's largest holding at 11 percent. Such financials make up more than half the fund's weight, and also contribute to a hefty 4 percent yield based on the past two semiannual payouts. Materials, which has the only other top five holding in BHP Billiton (BHP), is the only other double-digit sector weight at 11 percent.
Expenses: 0.48 percent
SPDR S&P China ETF (GXC)
Last, but certainly not most, there's China. While China has among the most single-country ETF options out there, GXC is the best you can get out of most worlds. It's broad at 360 stocks, and it's decently priced at 0.59 percent in annual fees. The fund is skewed toward financials (30 percent) and IT (28 percent), but not terribly more than its peers. GXC is slightly less top-heavy in Tencent and Alibaba than the iShares MSCI China ETF (MCHI), and it has a performance edge over it, to boot. This isn't a screamingly interesting Chinese fund, but it doesn't have to be.
Expenses: 0.59 percent
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