Top 10 Asia-Pacific Regional ETFs

By Dave Fry

NEW YORK ( ETF Digest) -- Our goal in this profile is to help investors wade through the many competing ETF offerings available. Using our long experience as an ETF publication, and nearly 40 years in the investment business, we can help select those ETFs that matter and may or may not be repetitive. The result is a more manageable list of issues from which to view and make selections.

There is currently an expanding list of 35 ETFs oriented to Asia-Pacific market whether in single country funds or with regional issues. The following analysis features a fair representation of regional ETFs available. We believe from these investors may choose an appropriate ETF to satisfy the best index-based offerings individuals and financial advisors may utilize.

We're not ranking these ETFs favoring one over another so don't let the listing order mislead you. Although we may use some of these in ETF Digest portfolios it's not our intention to recommend one over another.

ETFs are based on indexes tied to well-known index providers including Russell, S&P, Barclays, MSCI, Dow Jones and so forth. Also included are some so-called "enhanced" indexes that attempt to achieve better performance through more active management of the index.

Where competitive issues exist and/or repetitive issues available at a fee cost saving we mention those as other choices. New issues are coming to market consistently (especially globally) and sometimes these issues will need to become more seasoned before they may be included at least in our listings.

For traders and investors wishing to hedge, leveraged and inverse issues are available to utilize from ProShares and Direxion and where available these are noted.

iShares Pacific ex-Japan ETF ( EPP) follows the MSCI Pacific ex-Japan Index which follows a blend of Australia, Hong Kong, New Zealand and Singapore equity markets with a heavy weighting toward Australia (65%). The fund was launched in October 2005. The expense ratio is .50%. AUM (Assets under Management) equal $4 billion and average daily trading volume is over 1M shares. As of late July 2011 the annual dividend was $1.97 making the current yield just above 4% and YTD return of .70%.

For investors interested in hedging or speculating ProShares features leveraged long and short ETFs linked to this index.

Data as of July 2011

EPP Top Ten Holdings & Weightings

1. BHP Billiton Limited (BHPLF): 9.82%

2. Commonwealth Bank of Australia (CBA): 5.42%

3. Westpac Banking Corp (WBC): 4.57%

4. National Australia Bank Limited (NAB): 3.94%

5. Australia & New Zealand Banking Grp Ltd. (ANEWF): 3.94%

6. Rio Tinto Limited (RIO): 2.46%

7. Wesfarmers Limited (WES): 2.30%

8. Woolworths Limited (WOW): 2.29%

9. Newcrest Mining Limited (NCM): 2.09%

10. Woodside Petroleum Limited (WOPEF): 2.00%

Vanguard Pacific ETF ( VPL) tracks the MSCI Pacific Index which includes the region ranging from Japan (58%) and Australia (26%) with the rest divided between markets like Hong Kong, New Zealand and Singapore. The fund was launched in March 2005. The expense ratio is .14%. AUM equal $1.7 billion and average daily trading volume is 148,000 shares. As of late July 2011 the dividend was $2.24 making the current yield 3.80% and year-to-date return 1.30%.

Data as of July 2011

VPL Top Ten Holdings and Weightings

1. BHP Billiton Limited (BHPLF): 4.19%

2. Toyota Motor Corporation (7203): 2.84%

3. Commonwealth Bank of Australia (CBA): 2.18%

4. Westpac Banking Corp (WBC): 1.95%

5. Australia & New Zealand Banking Grp Ltd. (ANEWF): 1.64%

6. Honda Motor Company (7267): 1.57%

7. Mitsubishi UFJ Financial Group, Inc. (8306): 1.52%

8. National Australia Bank Limited (NAB): 1.48%

9. Canon, Inc. (CAJFF): 1.27%

10. Sumitomo Mitsui Financial Group, Inc. (SMFNF): 1.08%

iShares Asia ex-Japan ETF ( AAXJ) follows the MSCI All Country Asia ex-Japan Index which includes the performance of 11 developed and emerging Asian equity markets. The fund was launched in August 2008. The expense ratio is .74%. AAXJ trades commission free at TD Ameritrade. AUM equal nearly $2 billion and average daily trading volume is 480,000 shares. As of late July 2011, the annual dividend was $1.32 making the current yield just fewer than 2% and year--to-date return -1.30%.

Data as of July 2011

AAXJ Top Ten Holdings and Weightings

1. Samsung Electronics Co., Ltd. (BC94): 2.79%

2. iShares MSCI South Korea Index: 2.17%

3. Reliance Industries Ltd. ADR (RLI): 2.02%

4. Infosys Technologies, Ltd. ADR (INFY): 1.87%

5. China Mobile Ltd. (00941): 1.85%

6. HDFC Bank, Ltd. ADR (HDB): 1.80%

7. Taiwan Semiconductor Manufacturing ADR (TSM): 1.76%

8. Industrial And Commercial Bank Of China Ltd. (01398): 1.70%

9. ICICI Bank Ltd. ADR (IBN): 1.69%

10. China Construction Bank Corp (00939): 1.51%

SPDR Emerging Asia Pacific ETF ( GMF) follows the S&P Asia Pacific Emerging BMI Index which includes publicly traded companies throughout emerging Asian Pacific markets. The fund was launched in March 2007. The expense ratio is .59%. AUM equal $730 million and average daily trading volume is 75,000 shares. As of late July 2011 the annual dividend was $1.65 making the current yield less than 2% and year to date 1.00%.

Data as of July 6, 2011

GMF Top Ten Holdings and Weightings

1. Taiwan Semiconductor Manufacturing ADR (TSM): 3.04%

2. China Construction Bank Corp (00939): 2.63%

3. China Mobile Ltd. (00941): 2.15%

4. Industrial And Commercial Bank Of China Ltd. (01398): 1.89%

5. Baidu, Inc. ADR (BIDU): 1.83%

6. PetroChina Company, Ltd. (00857): 1.77%

7. Reliance Industries Ltd. ADR (RLI): 1.74%

8. HTC Corporation (2498): 1.74%

9. CNOOC, Ltd. (00883): 1.67%

10. Infosys Ltd ADR (INFY): 1.64%

iShares Asia 50 ETF ( AIA) follows the S&P Asia 50 Index which the 50 leading companies from Hong Kong, South Korea, Singapore and Taiwan. The fund was launched in November 2007. The expense ratio is .50%. AUM equal $235 million and average daily trading volume is 35,000 shares. As of late July 2011 the annual dividend was $.80 making the current yield 1.7% and year-to-date return of .25%.

Data as of July 6, 2011AIA Top Ten Holdings

1. Samsung Electronics Co., Ltd. (SSNLF): 10.46%

2. Taiwan Semiconductor Manufacturing (2330): 6.00%

3. China Construction Bank Corp (00939): 5.35%

4. China Mobile Ltd. (00941): 4.42%

5. Industrial And Commercial Bank Of China Ltd. (01398): 3.86%

6. Hyundai Motor Company Ltd. GDR (HYUO): 3.56%

7. CNOOC, Ltd. (00883): 3.39%

8. PetroChina Company, Ltd. (00857): 2.86%

9. Posco ADR (PKX): 2.85%

10. Hon Hai Precision Ind. Co., Ltd. (2317): 2.61%

First Trust ISE Chindia ETF ( FNI) follows the ISE Chindia Index which consists of 50 ADRs, ADSs and/or stocks of companies that are listed in either China or India. The fund was launched in May 2007. The expense ratio is .60%. AUM equal $150 million and average daily trading volume is 42,000 shares. As of late July 2011 the annual dividend was $.11 making the current yield less than .50% and year-to-date return 3.10%.

Data as of July 2011

FNI Top Ten Holdings and Weightings

1. Baidu, Inc. ADR (BIDU): 8.62%

2. CNOOC, Ltd. ADR (CEO): 7.34%

3. HDFC Bank, Ltd. ADR (HDB): 6.67%

4. ICICI Bank Ltd. ADR (IBN): 6.66%

5. China Mobile Ltd. ADR (CHL): 6.26%

6. Infosys Ltd ADR (INFY): 6.05%

7. PetroChina Company, Ltd. ADR (PTR): 4.42%

8. Sterlite Industries (India), Ltd. ADR (SLT): 4.11%

9. Ctrip.com International, Ltd. ADR (CTRP): 3.90%

10. Wipro, Ltd. ADR (WIT): 3.69%

WisdomTree Asia-Pacific ex-Japan ( AXJL) follows the WisdomTree Asia Pacific ex-Japan Index which is a fundamentally weighted index following the top 300 dividend paying companies in the region and ranked by market capitalization. The fund was launched in June 2006. The expense ratio is .48%. AUM equal $70 million and average daily trading volume is less than 5,000 shares. As of late July 2011 the annual dividend was $2.03 making the current yield less than 3% and year-to-date return of 4.10%.

Data as of July 2011

AXJL Top Ten Holdings and Weightings

1. China Mobile Ltd. (00941): 6.34%

2. China Construction Bank Corp (00939): 4.56%

3. Commonwealth Bank of Australia (CBA): 3.37%

4. Westpac Banking Corp (WBC): 3.21%

5. WisdomTree India Earnings: 2.57%

6. Australia & New Zealand Banking Grp Ltd. (ANEWF): 2.49%

7. National Australia Bank Limited (NAB): 2.32%

8. Telstra Corporation Ltd. (TTRAF): 2.27%

9. BHP Billiton Limited (BHPLF): 2.20%

10. CNOOC, Ltd. (00883): 2.04%

PowerShares BLDRS Asia 50 ADR ETF ( ADRA) follows the Bank of New York Mellon Asia 50 ADR Index covering 50 different Asian market-based depository receipts. The fund was launched in November 2002. The expense ratio is .23%. AUM equal $42 million and average daily trading volume is 5,000 shares. As of late July 2011 the annual dividend was $.23 making the current yield .85% and year-to-date return -1.50%.

Data as of July 2011

ADRA Top Ten Holdings and Weightings

1. BHP Billiton Limited ADR (BHP): 12.10%

2. Toyota Motor Corporation ADR (TM): 9.38%

3. Westpac Banking Corp ADR (WBK): 5.34%

4. Honda Motor Company ADR (HMC): 5.18%

5. Taiwan Semiconductor Manufacturing ADR (TSM): 5.02%

6. Mitsubishi UFJ Financial Group, Inc. ADR (MTU): 4.88%

7. Canon, Inc. ADR (CAJ): 4.18%

8. China Mobile Ltd. ADR (CHL): 3.61%

9. Sumitomo Mitsui Financial Group, Inc. ADR (SMFG): 3.04%

10. CNOOC, Ltd. ADR (CEO): 2.84%

PowerShares Asia Pacific ex-Japan ETF ( PAF) follows the FTSE RAFI Developed Asia Pacific ex-Japan Index which is designed to track the largest equities in the region selected on four fundamental measures: book value, income, sales and dividends. The fund was launched in June 2006. The expense ratio is .80%. AUM equal $81 million and average daily trading volume is 7.6,000 shares. As of late July 2011 the annual dividend was $.71 making the current yield 1.25% and year-to-date return of 4.50%.

Data as of July 2011

PAF Top Ten Holdings and Weightings

1. Samsung Electronics Co., Ltd. (SSNLF): 5.30%

2. BHP Billiton Limited (BHPLF): 4.20%

3. National Australia Bank Limited (NAB): 3.93%

4. Commonwealth Bank of Australia (CBA): 3.68%

5. Westpac Banking Corp (WBC): 3.26%

6. SK Holdings Co Ltd: 3.22%

7. Australia & New Zealand Banking Grp Ltd. (ANEWF): 2.95%

8. Hyundai Motor Company Ltd. GDR (HYUO): 2.53%

9. Posco ADR (PKX): 2.27%

10. Hutchison Whampoa Ltd (00013): 1.77%

Global X ASEAN 40 ETF ( ASEA) follows the FTSE/ASEAN 40 Index which measures the 40 largest companies in five ASEAN regions: Indonesia, Philippines, Singapore, Malaysia and Thailand. The fund was launched in February 2011. The expense ratio is .65%. AUM equal $20 million and average daily trading volume is near 25,000 shares. As of late July 2011 the annual dividend is negligible but year-to-date return is 14.20%.

Data as of July 2011

ASEA Top Ten Holdings and Weightings

1. Astra International Tbk: 6.09%

2. DBS Group Holdings, Ltd. (D05): 5.59%

3. Singapore Telecommunications Limited (Z74): 5.57%

4. Oversea-Chinese Banking Corp Ltd. (O39): 5.26%

5. United Overseas Bank Limited (U11): 5.17%

6. CIMB Group Holdings Berhad: 4.49%

7. Malayan Banking Bhd Maybank: 4.43%

8. Public Bank Berhad: 4.23%

9. Sime Darby Berhad (Malaysia): 3.75%

10. Keppel Corporation Limited (BN4): 3.27%

For the last decade the Asia-Pacific region has offered the best prospects for economic growth and potential investment returns. These markets have been more volatile historically but have seen this become reduced in the past few years as markets have become more developed than previously. Some of this easing of volatility has been due to high degree of correlation of global sectors given high levels of liquidity from low levels of interest rates and easy money policies globally. Nevertheless, with better economic growth inflation fears will rise and authorities have been trying to contain these by increasing interest rates and/or raising reserves.

There is a lot to choose from in terms of indexes linked to ETFs. Some are passive and duplicative relatively. It's essential to remember it remains a game of battleship for sponsors seeking to be first to a sector space or just being competitive in the space. This is their business interest apart which you must separate from your investment interest.

Investors should note that in a rising market particularly ETFs linked to enhanced issues may tend to outperform conventional index linked issues. I've not done enough analysis to determine their relative performance during down market periods as some of these have yet to be tested in this regard.

New ETFs from highly regarded and substantial new providers are also being issued. These may include Charles Schwab's ETFs and Scottrade's Focus Shares which both are issuing new ETFs with low expense ratios and commission free trading at their respective firms. These may also become popular as they become seasoned.

For further information about portfolio structures using this or other ETFs see www.etfdigest.com.

(Source for holding data is from ETF Database and from various sponsors.)

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Dave Fry is founder and publisher of ETF Digest, Dave's Daily blog and the best-selling book author of Create Your Own ETF Hedge Fund, A DIY Strategy for Private Wealth Management, published by Wiley Finance in 2008. A detailed bio is here: Dave Fry.

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