Best Asia ETFs by Performance
Led by Chinese technology and consumer discretionary sectors, the top-performing Asia-Pacific exchange-traded funds have gained more than 30% over the past three months, which is more than 10 times higher than the gain on the S&P 500 index for that period.
Investing in Asian countries like China, Japan, and India with ETFs can offer investors exposure to rapidly growing markets and potentially provide diversification benefits to a portfolio.
Learn more about Asia ETFs, including details on the top-performing funds in 2024, and the benefits and risks of investing in Asian markets.
What Are Asia ETFs?
Asia ETFs, also called Asia-Pacific ETFs, are exchange-traded funds that are designed to track the performance of a basket of stocks or securities in the Asian market. There are many different types of Asia ETFs available, including broad-based funds that invest in stocks across the entire Asian region, as well as more targeted funds that focus on specific countries, such as China or Taiwan.
Some popular Asia ETFs, as measured by assets under management (AUM), include the iShares MSCI Japan ETF (EWJ), with over $16 billion in AUM, JPMorgan BetaBuilders Japan ETF (BBJP) with $11 billion in AUM, and the Vanguard FTSE Pacific ETF (VPL), with nearly $7 billion in AUM.
5 Best Asia Pacific ETFs by 2024 Performance
Ticker | Fund | 3-mo Return | AUM | Expense Ratio |
34.23% | $6.6M | 0.69% | ||
33.70% | $8.3M | 0.65% | ||
30.44% | $6.0B | 0.69% | ||
29.01% | $245.5M | 0.65% | ||
26.81% | $4.6B | 0.74% |
Data as of May 2, 2024. Leveraged ETFs were not included in the search for this list.
KraneShares Hang Seng Tech ETF
The KraneShares Hang Seng Tech ETF (KTEC) tracks a market-cap-weighted index of the 30 largest technology companies headquartered and operating primarily in the China region, including Hong Kong and Macau.
3-month return: 34.23%
Assets under management: $6.6 million
Expense ratio: 0.69%
KraneShares CICC China 5G & Semiconductor Index ETF
The Kraneshares CICC China 5G & Semiconductor Index ETF (KFVG) tracks a market-cap-weighted index of Chinese companies in the 5G and semiconductor-related industries.
3-month return: 33.70%
Assets under management: $8.3 million
Expense ratio: 0.65%
KraneShares CSI China Internet ETF
The KraneShares CSI China Internet ETF (KWEB) tracks a market cap-weighted index consisting of overseas-listed Chinese internet software and services companies.
3-month return: 30.44%
Assets under management: $5.6 billion
Expense ratio: 0.69%
Global X MSCI China Consumer Discretionary ETF
The Global X MSCI China Consumer Discretionary ETF (CHIQ) tracks a cap-weighted index of Chinese consumer discretionary companies of mid- and large capitalization.
3-month return: 29.01%
Assets under management: $245.5 million
Expense ratio: 0.65%
iShares Trust China Large-Cap ETF
The iShares Trust China Large-Cap ETF (FXI) tracks a market-cap-weighted index of the 50 largest Chinese stocks traded on the Hong Kong Stock Exchange.
3-month return: 26.81%
Assets under management: $4.6 billion
Expense ratio: 0.74%
Benefits and Risks of Investing in Asia ETFs
Investing in Asia ETFs can offer several benefits, including diversified, low-cost exposure to a rapidly growing market. However, these funds also carry associated risks, such as currency risk, concentration risk and the potential for volatility. Investors should carefully consider both the benefits and risks of Asia stock ETFs before buying shares.
Benefits
Exposure to the rapidly growing Asian market: Asia is home to some of the world's fastest-growing economies, and investing in Asia ETFs can provide investors with exposure to these markets. Many Asian countries, such as China, India and Vietnam, are experiencing robust economic growth, and investing in Asia ETFs can allow investors to participate in this growth.
Diversification: Investing in Asia ETFs can provide investors with diversification benefits, as these funds typically hold a basket of stocks across different countries and sectors. This can help reduce the risk of losses from any one particular investment.
Low cost: Asia ETFs are generally low-cost investments, with expense ratios often significantly lower than actively managed mutual funds.
Risks
Volatility: Asia ETFs can be subject to high levels of volatility due to factors such as currency fluctuations, geopolitical risks and market cycles.
Currency risk: Investing in Asia ETFs can expose investors to currency risk, as many of the funds hold stocks denominated in Asian currencies. Exchange rate fluctuations can impact returns and increase risks.
Regulatory and political risks: Regulatory and political risks in Asian countries can impact the performance of Asia ETFs. For example, changes in government policies or regulations can affect the business environment and impact the companies held by the ETFs.
Concentration risk: Some Asia ETFs may be heavily concentrated in a particular sector, country or company, which can increase the risk of losses in case of any adverse events in that particular sector or company.
Bottom Line on Investing in Asia With ETFs
In summary, Asia ETFs offer investors exposure to the fast-growing Asian markets, including China, Japan, Taiwan, Singapore and many other Asian countries. However, as with any investment, it is important to carefully consider the risks and potential rewards of investing in these funds before buying shares.