SPDR S&P Emerging Asia Pacific ETF (GMF) is an exchange-traded fund (ETF) specifically focused on investing in publicly traded companies in emerging Asian and Pacific markets.
The ETF is a market-cap-weighted fund based on the S&P Asia Pacific Emerging BMI index. However, GMF employs a sampling strategy, which means it is not required to buy all of the securities represented in the BMI index.
Instead, the fund’s managers choose to hold a specific subset of the securities in the index with similar risk and return as the overall index. The idea of the strategy is to exclude the smaller-cap companies that are vulnerable to bankruptcy or acquisition risks.
With $337 million in total assets, GMF offers size and liquidity in a segment where funds generally lack these qualities. The fund’s managers only select those companies with a float-adjusted market capitalization of at least $1 billion to add to its holdings, and it normally invests at least 90% of its assets in the securities of these companies.
With more than 60% of its total investments in China and Taiwan, the fund is considered non-diversified. Other significant holdings of the fund include companies based in India, Hong Kong, Thailand, Malaysia and Indonesia, which together compose over 30% of the total investments. Approximately 50% of the fund’s money goes into the technology and financial sectors, which will rise as the large tech companies in the Asia-Pacific region continue to expand.
Year to date, the fund has had a return of 12.17%, beating the S&P 500’s return of 4.47%. Typically for the Asia-Pacific emerging market segment, the fund has had its share of ups and downs throughout the past year, but it has managed to hold a positive overall trend. GMF has a dividend yield of 3.52% and an expense ratio of 0.49%.
Its top five holdings are the Tencent Holdings Ltd., 5.21%; Alibaba Group Holding Ltd ADR, 4.00%; Taiwan Semiconductor Manufacturing Co Ltd ADR, 3.83%; China Mobile Ltd, 2.41%; and China Construction Bank Corp H, 2.34%. These five holdings combined make up close to 20% of the fund’s assets.
GMF provides investors with exposure to large companies in the Asia-Pacific Region. If you wish to invest in a region that is growing at a fast pace, you may wish to consider SPDR S&P Emerging Asia Pacific ETF (GMF) for your portfolio.