Asia Pacific (ex Japan) Index tracker recommendations

Tantalus86

hey guys. I'm just putting together an asset allocation & looking at funds for my new portfolio and i'm coming a bit unstuck for these type of funds at a reasonable price. Any recommendations.

Rich1976

I use iShares Asia Pacific ex Japan Fund has a  charge of 0.13%

El_Torro

I used to be invested in iShares Pacific Ex Japan Equity Index. At 0.13% you shouldn't complain about the charges

The fund performed fine for me while I had it. The only reason I sold it is because I ditched most of my funds and now invest mainly in multi asset funds. I just think it's a lot less effort than choosing the geographical allocation myself, with similar results.

darkidoe

Suggest - VAPX

jimjames

Depends what your platform offers, I use Fidelity Pacific index tracker in my ISA, that's also 0.13% fee

Ted_01

Rich1976 said:

I use iShares Asia Pacific ex Japan Fund has a  charge of 0.13%

Aren't you forgetting the 'Transaction cost' at 0.14% which is added to the 'Ongoing charge'.

I've got the following two Pacific ex Japan funds.
HSBC Pacific Index
ASI Asia Pacific Equity Enhanced Index Fund
This second one includes emerging Asia Pacific too, I expect theres some overlap between them.

bowlhead99

Ted_01 said:

Rich1976 said:

I use iShares Asia Pacific ex Japan Fund has a  charge of 0.13%

Aren't you forgetting the 'Transaction cost' at 0.14% which is added to the 'Ongoing charge'.

I've got the following two Pacific ex Japan funds.
HSBC Pacific Index
ASI Asia Pacific Equity Enhanced Index Fund
This second one includes emerging Asia Pacific too, I expect theres some overlap between them.

Generally the 'transaction cost' figures are not so easy to predict as they depend on actual trading activity levels, and depending on the methodologies used, may not be fully comparable between funds; they will not be particularly high for index funds so a lot of investors don't bother to look at them and focus mainly on the OCF. The HSBC Pacific Index fund you mention will also have transaction costs when it buys and sells the underlying securities in response to investor subscription and redemption requests or when the index is adjusted from time to time.

The HSBC fund is aiming to track the exact same underlying "FTSE World Asia Pacific excluding Japan Index" as the iShares one, so you could compare their performances over long periods to review the tracking error which will encompass the effects of transaction costs and other issues.

The ASI fund is trying to deliver an 'enhanced' performance to beat the index so won't give the same result as the index it benchmarks against. Perhaps the more important difference between that and the two FTSE trackers is that its core target investment universe is based on MSCI All Countries rather than FTSE World, so it would include some other emerging markets; over 45% of the MSCI AC -based fund would be expected to be China and India (over 12% allocated to just Alibaba and Tencent) ; while those countries and companies do not appear in a FTSE World- based fund at all.    If someone already has an emerging markets allocation they would be doubling up on a big chunk of that if they used the ASI fund for their Pacific ex Japan allocation.

Ted_01

Thanks a lot for the explanations bowlhead.

The HSBC Pacific Index and iShares Asia Pacific ex Japan Fund track very closely when compared on a chart. But one difference between the 2 funds, the HSBC is an OEIC and the iShares is a Unit Trust, as a novice invester I chose to stick with OEIC's at the moment.

(Edit : Looking at the buy/sell difference on the iShares fund today the fund would have to go up by 5% to break even, why lose this 5% when one can invest in the HSBC version instead).

bowlhead99

Ted_01 said:

Thanks a lot for the explanations bowlhead.

The HSBC Pacific Index and iShares Asia Pacific ex Japan Fund track very closely when compared on a chart. But one difference between the 2 funds, the HSBC is an OEIC and the iShares is a Unit Trust, as a novice invester I chose to stick with OEIC's at the moment.

(Edit : Looking at the buy/sell difference on the iShares fund today the fund would have to go up by 5% to break even, why lose this 5% when one can invest in the HSBC version instead).

A UT can be dual-priced for buy versus sell, while an OEIC typically has one single price per day which will swing up or down around the actual NAV depending on the weight of investors buying or selling, to ensure that the cost of the subscription or redemption activity can effectively be borne by the investors buying or selling.

But there is not really a 5% difference between buy and sell. Typically, funds reserve the right to charge a 5% initial charge to retail investors, so you may see a 5% gap on the standard retail share class; but in practice any investor platform will discount that 5% initial fee to nil and the actual spread will be under half a percent, just like it is on the institutional share classes. So in practice you will get around the same returns as you would from an OEIC which only posted single prices and nudged them up when there was a lot of buying or down when there was a lot of selling.

Linton

ON a more general point, a difference between buy and sell prices is not necessarily something to be avoided.  Buying and selling of units adds to the fund manager's costs.  Under single pricing those costs are spread over all unit holders whereas with split pricing the costs are mainly borne by the people who trade frequently. This is a particular concern if excess trading could lead to major costs to the fund itself eg for directly held property or illiquid share holdings.  

Shocking_Blue

Ted_01 said:

Thanks a lot for the explanations bowlhead.

The HSBC Pacific Index and iShares Asia Pacific ex Japan Fund track very closely when compared on a chart. But one difference between the 2 funds, the HSBC is an OEIC and the iShares is a Unit Trust, as a novice invester I chose to stick with OEIC's at the moment.

(Edit : Looking at the buy/sell difference on the iShares fund today the fund would have to go up by 5% to break even, why lose this 5% when one can invest in the HSBC version instead).

Ted_01,
https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000OOB6&tab=1
Is this the HSBC fund you're referring to?
Thanks