Asia Pacific ETFs Without Japanese Exposure

 |  Includes: EPP, GMF
by: Tom Lydon

In recent news, Japan has been the talk of Asia, but while all the bad press has focused on Japan’s market and economy, the rest of the Asia Pacific region, along with related exchange traded funds, is still ripe with opportunities.

This past weekend’s news was relatively positive for the island of Japan. Japanese reactors are gradually getting under control, and Sony (NYSE:SNE) and Nissan (OTCPK:NSANY) plants are resuming operations after the short delay.

As Pacific markets declined in sympathy with Japan, investors may look for buying opportunities in the Pacific region. Japanese markets dropped around 23% from high to inter-day lows. Meanwhile, valuations in surrounding countries and their potential for growth remain on track.

For those who feel Japanese assets are still uncertain and relatively risky, there are other investment options in the region that don’t have direct Japanese exposure.

For instance, two ETFs that give exposure to the Pacific region ex-Japan, include:

  • iShares MSCI Pacific Ex-Japan Index Fund (NYSEARCA:EPP). Top country allocations include: Australia 64%, Hong Kong 19% and Singapore 13%. Australia is a major commodities producers, and agriculture, industrial metals and energy demand will increase during the Japanese rebuilding effort. Additionally, China’s demand hasn’t waned.
  • SPDR S&P Emerging Asia Pacific (NYSEARCA:GMF). Top country allocations include: China 36%, Taiwan 31% and India 19%. These countries continue to enjoy high GDP growth. The fund is heavily weighted in its top two sectors, with almost 50% in technology and banks.

Furthermore, investors may also select individual country-specific ETFs in the region, as well.

Max Chen contributed to this category.