Better Know an ETF: The Vanguard Asia Pacific Index ETF

 Many Canadians are looking for foreign exposure in their portfolios. Many have turned to Asia for that exposure, a part of the world which is home to some of the fastest growing economies.

Let’s take a closer look at Vanguard’s Asia-specific offering, the Vanguard FTSE Developed Asia Pacific Index ETF (TSX:VA).

It’s a relatively small ETF, with a market cap of $33.5 million. Google Finance lists it as trading 11,211 shares per day on average, which is sufficient liquidity for a retail investor.

It’s an incredibly diverse ETF, holding more than 2,000 stocks. The median market cap for each holding is more than $20 billion. The top five holdings are some of the world’s largest companies, including Samsung, Toyota Motors, Commonwealth Bank of Australia, Mitsubishi Financial Group, and Westpac Banking Corp.

Japan is the largest weighting by country, with almost 59% of assets invested in Japanese countries. Australia is second with a 17.1% weighting, followed by South Korea (11.1%), Hong Kong (8.9%), and Singapore (3.2%). A notable country missing from this ETF is China, although investors are getting plenty of exposure to the world’s most populous country via Hong Kong.

The ETF has a 12-month trailing yield of 1.85%, with the most recent dividend coming in at just over 17 cents per unit. The dividend will be lumpier than an ETF covering North American stocks because Asian companies don’t traditionally pay quarterly or monthly dividends.

Vanguard consistently has some of the lowest ETF fees out there. This ETF follows that trend with a management expense ratio of just 0.22%, which is quite low for a foreign ETF.