Rolle im Portfolio
The fund provides exposure to large- and mid-cap stocks within the Asian markets, outside of Japan. The MSCI All Country (AC) Asia ex-Japan Index is diversified across a fairly large number of individual constituents and sectors. This fund is suitable as a core holding for those seeking diversified exposure to Asian equities. This fund can also be used as a tactical tool for exposure to Asia’s faster growing economies while avoiding Japan.
As the fund does not pay out distributions, it may not suit an investor looking for regular investment income.
Fundamentale Analyse
China’s GDP grew by 7.7% in 2013, matching 2012’s performance. Though still robust, it is less than had become customary. China has done well as the manufacturer of the world, but in turn its growth relies on consistent demand from developed markets. As the financial crisis showed, demand from the West greatly impacts China’s economy, and reduced aggregate demand has taken a long-term toll on the manufacturing industry. China’s Purchasing Manager Index (PMI), which indicates the strength of the manufacturing sector, fell from 55 in the mid-2000s to nearly 40 in 2008, but has reached an 18-month high of 52.0, indicating expansion and bolstering chances of the government meeting its 7.5% growth target for 2014.
Even so, China has found itself tied up in ongoing territorial disputes, with Japan-- its second largest trading partner-- and other neighbouring countries, which disrupt economic expansion and discourage foreign investment.
Although also classified as an emerging market by MSCI, many consider South Korea a developed country. South Korea’s economy grew dramatically over the last few decades but has since slowed, growing only 3% in 2013 as a result of weaker consumer spending. Much of the private sector growth has been driven by large conglomerates-- such as Samsung, LG and Hyundai-- but corporate governance concerns have dogged them as a result of their family-run structure. South Korea’s growth depends heavily on China, its largest market for exports.
Taiwan is also dependent on China as a trading partner. Its export-driven economy has expanded considerably in the last few decades but its recent growth has not been as robust as some of its neighbours'. Its GDP only grew 1.7% in 2013 but is forecasted by the Taiwanese government to hit 2.5% in 2014.
Over the last 15 years, the MSCI AC Asia ex-Japan Index has had an annualised return of 7.9%, versus 4.4% for the S&P 500 and 4.2% for the MSCI World. After bottoming out at 8.0 in February 2009, the price-to-earnings ratio of the MSCI Pacific ex Japan Index climbed as high as 13.7 in 2014, averaging 13.3 over five years.
Indexkonstruktion
The MSCI AC Asia ex-Japan NR index is a free-float adjusted market capitalisation weighted index covering large and medium sized companies in about 10 countries in Asia excluding Japan. It covers approximately 85% of the free float-adjusted market capitalisation of the component markets. The index has about 600 constituents and is reviewed quarterly, with size cut-offs recalculated semi-annually. Components must meet minimum criteria for liquidity, foreign ownership, as well as a waiting period for newly-listed stocks. The top geographic exposures are China and Korea (20-25% each), followed by Taiwan and Hong Kong (12-17% each) and India (8-10%). On a sector basis, the index is broadly diversified. The top weight is financials (30-35%), followed by information technology (20-25%), consumer discretionary (10-15%) and industrials (5-10%). The index is not very concentrated, with 15-20% in the top 10 names. The top position is Samsung Electronics (3-5%), followed by Taiwan Semicon Manufacturing (3-4%) and Tencent Holdings (2-3%).
Fondskonstruktion
The fund uses synthetic replication to provide exposure to the underlying benchmark, entering a fully- funded swap with parent company Deutsche Bank. Investors’ cash is transferred to Deutsche Bank, which then puts collateral in a segregated account opened in the name of Deutsche Bank and pledged to the fund. The substitute basket is marked to market daily and its composition can change every day. At the time of writing, the substitute basket consists almost entirely of equities from a variety of sectors. Its total value was equivalent to 111.01% of the fund’s net asset value at the time of writing. In compliance with UCITS III rules, net counterparty exposure cannot exceed 10% of the fund’s NAV, implying that the substitute basket must at a minimum be valued at 90% of the fund’s net assets. At the time of writing, the substitute basket mainly consisted of Dutch, Spanish, UK and Italian stocks from a variety of industries. Under the terms of the swap, the counterparty agrees to provide the fund with exposure to the total return of the MSCI AC Asia ex Japan Index, net of any associated taxes, costs or fees. The return from the swap assumes that all dividends paid by the underlying stocks are reinvested in the index. This fund does not pay out any dividend distributions.
Gebühren
The fund levies a total expense ratio (TER) of 0.65%, which falls in the middle of the range for ETFs tracking Asian equities. Other costs potentially borne by the shareholder but not included in the total expense ratio include swap fees, and bid-ask spreads and brokerage fees when buy and sell orders are placed for ETF shares.
Alternativen
Many providers offer ETFs tracking the MSCI All Country Asia ex-Japan Index including iShares, Lyxor and UBS. The UBS product has the lowest fees, with a TER of 0.45%.
Investors seeking more concentrated exposure to Asia's emerging markets may consider ETFs that track the MSCI EM Asia Index, which includes greater exposure to China, South Korea, Taiwan, and India in lieu of Hong Kong. iShares, db x-trackers and SPDR currently offer ETFs tracking this index, all of which have a TER of 0.65%.
