Eyeing Asia’s Largest Emerging Market Fund

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

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%.

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View the current price, volume, performance and top 10 holdings of GMF at ETFU.com.

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.

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