HSBC MSCI AC Far East ex Japan UCITS ETF (Dist)

Issuer: HSBC

Asset Class: Equity

TER: 45bps

Trading Currency: GBP

Pays Income: False

Listing Date: 13 Jul 2022

Ticker: HFEJ

ISIN: IE00022VXYM7

This fund offers targeted exposure to the dynamic equity markets of the Asia Pacific region, specifically excluding Japan. It provides a strategic way to invest in a basket of companies across both developed and emerging economies in this fast-growing part of the world. By tracking a market-cap-weighted index, the portfolio gives significant allocation to the largest and most established companies in countries such as China, Taiwan, South Korea, and India. This approach allows investors to participate in the long-term growth story of Asia, driven by powerful secular trends like a rising middle class, increasing consumption, and technological innovation.

Investing in this region can offer valuable diversification benefits for a global portfolio, as the economic cycles and market drivers in Asia can differ from those in North America and Europe. The exclusion of Japan provides a more concentrated bet on the other key economies in the Far East. The fund is well-suited for investors with a long-term horizon who are willing to accept the higher volatility associated with emerging markets in exchange for potentially higher growth prospects. It serves as an efficient, single-product solution to gain comprehensive access to a diverse set of industries, from technology and financials to consumer goods, across the vibrant Asian landscape.

The portfolio is physically replicated, meaning it holds the actual shares of the underlying companies, which offers transparency. The distributing nature of the share class means that any dividends received from the constituent companies are paid out to investors periodically, providing a potential income stream. This structure makes it a straightforward tool for capturing the economic expansion and corporate profitability of the Asia-Pacific ex-Japan region.