Investment Focus: The ETF tracks the MSCI AC Asia Pacific ex Japan Index, providing exposure to large- and mid-cap equities across developed and emerging Asia Pacific markets, excluding Japan. This includes countries like China, India, South Korea, and Australia.

Cost Structure: Features a low management fee of 0.18%, with Mirae Asset adopting a single management fee structure. Any expenses exceeding this cap will be absorbed by the manager rather than being charged to the fund.

Strategic Positioning: The fund is designed to capitalize on the Asia Pacific’s growth potential while offering attractive valuations compared to developed markets, such as the United States. It provides diversified exposure across various sectors, including both cyclical and structural growth industries.

Market Context: This launch follows Mirae Asset’s continued expansion of its ETF offerings, with the Global X platform now featuring 629 ETFs globally and $137 billion in combined assets under management.

The timing of this launch is notable, given the continued focus on Asia-Pacific markets as a growth engine. However, investors should be aware of the concentration risks and emerging market exposures associated with regional ETFs. The competitive 0.18% fee structure positions it well against other regional Asia Pacific ETF offerings.

Mirae Asset Global X MSCI Asia Pacific ex Japan ETF: Comprehensive Analysis

Executive Summary

Mirae Asset’s launch of the Global X MSCI Asia Pacific ex Japan ETF (3064/9064) represents a strategic expansion into regional thematic investing, targeting the high-growth Asia Pacific corridor while excluding Japan’s mature market dynamics. This launch positions the fund manager to capture institutional and retail demand for Asia-focused investments amid attractive regional valuations.

Strategic Context & Market Positioning

Mirae Asset’s Global Footprint

• Assets Under Management: US$256 billion globally (Dec 2024)
• ETF Platform Scale: 629 ETFs with US$137 billion AUM
• Geographic Presence: 25 offices worldwide, 1,000+ employees
• Investment Professionals: 280+ dedicated investment staff

Competitive Landscape Position

The 0.18% management fee positions this ETF competitively against existing Asia Pacific ETFs:

• Low-cost Strategy: Significantly below typical regional ETF fees (0.40-0.70%)
• Single Fee Structure: Manager absorbs excess costs, providing fee certainty
• Value Proposition: Cost efficiency combined with comprehensive regional exposure

Investment Structure & Process

Index Methodology

Tracking Index: MSCI AC Asia Pacific ex Japan Index

• Coverage: Large and mid-cap equities
• Geographic Scope: Developed and emerging Asia Pacific markets
• Exclusions: Japanese equities (separate market dynamics)
• Replication Strategy: Disciplined physical replication approach

Geographic Allocation (Estimated)

Based on typical MSCI AC Asia Pacific ex Japan weightings:

• China: ~40-45% (A-shares and offshore listings)
• India: ~20-25%
• South Korea: ~12-15%
• Taiwan: ~10-12%
• Australia: ~8-10%
• Other Markets: Singapore, Hong Kong, Thailand, Malaysia, Indonesia

Sector Diversification

• Technology: Significant exposure through Chinese and Korean tech giants
• Financials: Regional banking and insurance leaders
• Consumer Discretionary: E-commerce and retail growth stories
• Materials: Australian mining and Asian industrial commodities
• Healthcare: Growing pharmaceutical and biotech sectors

Investment Opportunities Analysis

Growth Catalysts

1. Demographic Dividend: Young, growing populations in India, Southeast Asia
2. Digital Transformation: Rapid tech adoption across emerging markets
3. Infrastructure Development: Massive capex cycles in developing economies
4. Consumer Market Expansion: Rising middle-class purchasing power
5. Supply Chain Reshoring: Manufacturing shifting from China to other Asian hubs

Valuation Attractiveness

• P/E Ratios: Asia Pacific trading at a discount to US markets
• Growth Premiums: Higher GDP growth rates supporting equity valuations
• Currency Positioning: Potential beneficiary of USD weakness cycles

Structural Themes

• Energy Transition: Renewable energy manufacturing and deployment
• Financial Inclusion: Banking penetration in underbanked populations
• Healthcare Access: Ageing populations driving medical demand
• Urban Development: Smart city initiatives and infrastructure modernization

Risk Assessment Framework

Geographic Concentration Risks

• Single Region Exposure: Higher volatility than global diversified funds
• Political Risk: Regulatory changes, trade tensions, geopolitical conflicts
• Currency Risk: Multiple currency exposures without hedging

Market-Specific Risks

• Emerging Market Volatility: Higher standard deviation of returns
• Liquidity Constraints: Mid-cap holdings may face trading difficulties
• Corporate Governance: Varying standards across jurisdictions

Regulatory & Tax Considerations

• Stock Connect Risks: Chinese A-share access via Hong Kong programs
• Tax Uncertainty: Mainland China capital gains tax treatment
• Delisting Risks: ChiNext and STAR Board regulatory requirements

Singapore Market Impact Analysis

Investor Access Benefits

Retail Investors:

• Cost-Effective Regional Exposure: 0.18% fee vs. multiple country-specific funds
• SGX Accessibility: Local exchange listing eliminates foreign exchange complexity
• Portfolio Diversification: Single vehicle for broad Asia Pacific allocation

Institutional Investors:

• Efficient Regional Allocation: Streamlined approach for pension funds, family offices
• Liquidity Management: Exchange-traded format enables tactical allocation adjustments
• Benchmark Alignment: MSCI index tracking supports institutional mandates

Singapore’s Role in Regional Finance

This launch reinforces Singapore’s position as:

• Asian ETF Hub: A Growing centre for regional investment product distribution
• Wealth Management Gateway: Access point for regional growth themes
• Financial Innovation Centre: Platform for sophisticated investment structures

Local Economic Implications

Asset Management Industry Growth:

• Competition Enhancement: Pressure on local providers to innovate and reduce fees
• Talent Development: Increased demand for regional investment expertise
• Infrastructure Investment: Trading systems and market infrastructure development

Investor Behaviour Impact:

• Home Bias Reduction: Easier access to regional diversification
• Investment Sophistication: Exposure to emerging market dynamics
• Risk Appetite Evolution: Comfort with regional thematic investing

Implementation Strategy for Investors

Portfolio Integration Approaches

Core-Satellite Strategy:

• Core Position: 5-15% allocation for regional growth exposure
• Satellite Usage: Tactical overweight during attractive entry points
• Rebalancing Frequency: Quarterly assessment of regional valuations

Risk Budgeting Framework:

• Volatility Allocation: Account for higher standard deviation vs. developed markets
• Correlation Analysis: Monitor relationship with global equity indices
• Currency Hedging Decisions: Evaluate the need for FX risk management

Due Diligence Considerations

1. Index Methodology Review: Understanding constituent selection and weighting
2. Tracking Error Analysis: Fund’s ability to replicate index performance
3. Securities Lending Impact: Revenue generation vs. counterparty risks
4. Tax Efficiency: Distribution policy and capital gains treatment

Market Timing & Outlook

Current Market Environment

• Valuation Discount: Asia Pacific trading below historical averages relative to developed markets
• Policy Support: Monetary easing cycles supporting regional growth
• Trade Dynamics: Supply chain diversification benefiting non-China Asian markets

Medium-Term Catalysts (2025-2027)

• Infrastructure Spending: Government stimulus programs across the region
• Technology Adoption: AI and digitalization cycles
• Energy Transition: Renewable energy capacity expansion
• Demographics: Continuing urbanurbanizationmiddle-class growth

Conclusion & Investment Implications

Mirae Asset’s launch of this regional ETF represents a sophisticated approach to capturing growth in the Asia Pacific while managing costs and complexity. The fund’s competitive fee structure, comprehensive geographic coverage, and institutional-quality index tracking make it an attractive vehicle for both strategic and tactical regional allocation.

For Singapore-based investors, this launch offers enhanced access to regional growth themes while reinforcing Singapore’s position as a hub for Asian investment solutions. The ETF’s structure addresses key investor concerns around cost, diversification, and liquidity while maintaining exposure to the region’s compelling long-term growth dynamics.

Investment Recommendation Framework:

• Suitable for: Investors seeking regional diversification with growth orientation
• Risk Profile: Moderate to aggressive risk tolerance required
• Time Horizon: Minimum 3-5 years to capture regional development cycles
• Portfolio Allocation: 5-20% depending on overall risk budget and geographic preferences

Understanding ETFs: A Complete Guide with Singapore Trader’s Story

What is an ETF?

An Exchange-Traded Fund (ETF) is an investment vehicle that combines the diversification benefits of mutual funds with the trading flexibility of individual stocks. ETFs are baskets of securities that track an underlying index, commodity, bonds, or collection of assets, but trade on stock exchanges just like individual company shares.

Key Characteristics of ETFs

Trading Flexibility: Unlike mutual funds that price once daily after market close, ETFs trade throughout market hours at real-time market prices.

Diversification: A single ETF can hold hundreds or thousands of underlying securities, providing instant portfolio diversification.

Transparency: ETF holdings are disclosed daily, allowing investors to see exactly what they own.

Cost Efficiency: Generally lower expense ratios than actively managed mutual funds, with many ETFs charging fees below 0.20% annually.

Tax Efficiency: The structure enables in-kind redemptions and minimizes single distributions to shareholders.

The History of ETFs

Genesis (1989-1993)

The ETF concept originated from the need to create tradeable baskets of securities. The first ETF, launched in Canada in 1989, tracked the Toronto Stock Exchange 35 Index. However, the watershed moment came in 1993 with the launch of the SPDR S&P 500 ETF (SPY) in the United States, which tracks the S&P 500 index and has become the foundation of the modern ETF industry.

Early Growth (1995-2000)

The late 1990s saw expansion beyond broad market indices. ETFs began tracking sector-specific indices, international markets, and bonds. The introduction of the Nasdaq-100 ETF (QQQ) in 1999 captured the momentum of the tech boom and demonstrated ETFs’ ability to provide targeted exposure.

Innovation Wave (2000-2010)

Post-dot-com crash, ETF innovation accelerated. Key developments included:

• International ETFs: Providing exposure to emerging markets
• Sector ETFs: Targeting specific industries like technology, healthcare, energy
• Bond ETFs: Fixed-income exposure through tradeable vehicles
• Commodity ETFs: Access to gold, oil, and agricultural products

Modern Era (2010-Present)

The 2010s witnessed explosive growth with several transformative trends:

• Thematic ETFs: Targeting trends like artificial intelligence, clean energy, cybersecurity
• Smart Beta ETFs: Alternative weighting methodologies beyond market capitalization
• Active management of capitalization and management within ETF structures
• ESG ETFs: Environmental, social, and governance-focused investing

By 2024, global ETF assets exceeded $10 trillion, with over 8,000 ETFs available worldwide.

Relevance in Modern Investing

Democratisation of Investing

Democratized investment, allowing small investors to access sophisticated strategies previously available only to institutions. A single share of an ETF can provide exposure to hundreds of companies across multiple countries and sectors.

Cost Revolution

ETFs sparked a “fee war” among investment providers, driving down costs across the entire investment industry. Many broad market ETFs now charge fees below 0.05% annually, saving investors billions in fees.

Portfolio Construction Tool

Modern portfolio theory becomes practical through the use of exchange-traded funds (ETFs). Investors can efficiently build diversified portfolios using ETFs as building blocks, combining domestic and international equities, bonds, commodities, and alternative investments to achieve a well-diversified portfolio.

Risk Management

ETFs enable precise risk management through targeted exposure and hedging capabilities, allowing investors to manage risk effectively. Inverse ETFs enable investors to bet against markets, while currency-hedged ETFs mitigate foreign exchange risk.

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The Singapore Connection: Li Wei’s Journey with Asia Pacific Growth

Chapter 1: The Discovery

Li Wei adjusted his glasses as he scrolled through the SGX website on his lunch break at Marina Bay Financial Centre. At 32, the quantitative analyst at a local hedge fund had been investing his personal savings methodically for five years. Still, something had been bothering him about the Asia exposure in his portfolio.

“Too much home bias,” he muttered, looking at his holdings dominated by Singapore REITs and local bank stocks. His investment thesis was sound – Asia Pacific was the world’s growth engine – but his execution was scattered across individual country ETFs with high fees and overlapping holdings.

The Straits Times notification on his phone caught his attention: “Mirae Asset Launches Global X MSCI Asia Pacific ex Japan ETF.” The 0.18% management fee made him pause. His current Asia exposure through separate China, India, and Korea ETFs was costing him nearly 0.60% in combined fees.

“Interesting timing,” Li Wei thought. Just last week, his colleague Sarah had complained about the complexity of rebalancing her regional allocation across six different country-specific funds.

Chapter 2: The Analysis

That evening, in his Tanjong Pagar apartment, Li Wei pulled up his investment spreadsheet – a meticulously maintained document that tracked every position, fee, and performance metric. His current Asia Pacific exposure told a story of inefficiency:

Current Holdings:

• iShares China ETF: S$12,000 (0.59% fee)
• Franklin India ETF: S$8,000 (0.89% fee)
• Samsung Korea ETF: S$5,000 (0.75% fee)
• Various individual Australian miners: S$7,000

Total Asia Exposure: S$32,000 with a weighted average fee of 0.72%

He opened the Mirae Asset fund factsheet. The MSCI AC Asia Pacific ex Japan Index would provide him with exposure to all these markets, plus Taiwan, Thailand, Malaysia, and Indonesia – markets he’d wanted to access but couldn’t justify the additional complexity.

“Single trade, single fee, full regional exposure,” he noted in his investment journal. The math was compelling: switching to the Mirae Asset ETF would save him approximately S$175 annually in fees while providing broader diversification.

Chapter 3: The Implementation

The following Monday, Li Wei logged into his Tiger Brokers account during his morning coffee at Ya Kun. The Global X MSCI Asia Pacific ex Japan ETF was already trading under ticker 3064, with healthy volume indicating institutional interest.

He started conservatively, placing an order for 100 shares at S$24.50 each – the ETF had opened close to its estimated net asset value (net asset value (NAV). The execution was smooth, and within seconds, he owned a slice of Asia’s most prominent companies: Taiwan Semiconductor, Tencent, Samsung, ASML, and dozens of others he’d never heard of but were apparently market leaders in their respective sectors.

Over the following weeks, Li Wei gradually consolidated his regional positions. The process was more complex than he’d anticipated – tax implications of selling a profitable position, timing the e-market to minimize transaction costs, and managing cash flows. But each trade simplified his portfolio while maintaining his regional investment thesis.

Chapter 4: The Learning Curve

Three months later, Li Wei was reviewing his quarterly performance over dim sum at Chinatown with his investment club – a group of young Singaporean professionals who met monthly to discuss market trends.

“The diversification benefit was immediate,” he explained to the group. “When Chinese tech stocks crashed on regulatory fears, my Indian IT holdings and Australian mining stocks cushioned the impact. Previously, my China ETF would have taken a massive hit.”

Rachel, a banker at DBS, leaned forward. “But aren’t you taking on more currency risk now? You’re exposed to Indian rupees, Korean won, Australian dollars…”

Li Wei nodded. “True, but that’s actually a feature, not a bug. When the USD strengthens, some of these currencies benefit from capital flows. It’s natural hedging.”

Marcus, who worked at GIC, raised another concern. “What about the emerging market volatility? Your portfolio’s standard deviation must have increased.”

“Slightly,” Li Wei admitted, “but the return per unit of risk improved. I’m getting compensated for that volatility through higher expected returns. Plus, the broad diversification means I’m not dependent on any single country’s policies or economic cycles.”

Chapter 5: The Unexpected Benefit

Six months into his ETF investment, Li Wei discovered an unexpected advantage during Singapore’s National Day weekend. He was reviewing his portfolio when news broke about unexpected policy announcements from the Reserve Bank of India.

In the past, such news would have sent him scrambling to assess the impact on his Franklin India ETF. Now, he simply noted that India represented approximately 23% of his Asia Pacific ETF – a significant but not dominant share. The Professional Index Committee at MSCI handles necessary rebalancing based on market capitalization.

“This is what they mean by ‘investing in the process, not the outcome,'” he reflected. Instead of trying to time individual country allocations, he was betting on the long-term growth of the entire Asia Pacific region.

His girlfriend Mei Ling, visiting from her job in Hong Kong, found him surprisingly relaxed about the market volatility. “Usually you’d be glued to your phone checking individual stock prices,” she observed.

“The ETF structure forced me to think bigger picture,” Li Wei explained. “I’m not worried about whether Samsung beats earnings estimates or if a specific Chinese property developer faces issues. I’m betting on Asian demographics, technological adoption, and economic development – themes that play out over years, not quarters.”

Chapter 6: The Community Impact

Li Wei’s investment approach began influencing his broader network. At his NS reservist training, he found himself explaining ETF investing to fellow Singaporeans who were intimidated by stock picking but wanted regional exposure.

Sergeant Kumar, a teacher in his civilian life, was particularly interested in this. “My CPF is doing well, but I want some growth exposure outside Singapore. Your approach sounds much simpler than picking individual countries.”

Li Wei walked him through the logic: “Think of it as buying a piece of Asia’s growth story. When India’s middle class expands, when Vietnam’s manufacturing grows, when Taiwan’s semiconductor industry innovates – you participate in all of it through one simple trade.”

The conversation highlighted something Li Wei had noticed about Singapore’s investment culture. Many locals were knowledgeable about REITs and local stocks, but were hesitant about regional investing due to its complexity and information gaps. ETFs, such as those that democratize access to these growth stories.

Chapter 7: The Realization

A year after his initial investment, Li Wei was invited to speak at a young professionals’ invorganizedeminar organized by the Institute of Banking and Finance Singapore. His topic: “Simplifying Regional Investing Through ETFs.”

Preparing his presentation, he reflected on the journey. His Asia Pacific allocation had outperformed his previous country-specific approach by 3.2% annually, not just due to better stock selection, but also from lower fees, improved diversification, and reduced behavioural errors resulting from over-trading.

“ETFs didn’t just change what I owned,” he told the audience of 200 young Singaporeans. “They changed how I think about investing. Instead of trying to time markets or pick winners, I focus on identifying long-term themes and finding efficient ways to gain exposure.”

A young woman in the audience raised her hand. “But isn’t this just passive investing? Aren’t you giving up the potential for higher returns?”

Li Wei smiled. “That’s the beautiful paradox of ETF investing. By trying to do less – picking fewer stocks, timing fewer trades, managing fewer positions – I ended up doing better. The ETF structure forced discipline that improved my overall returns.”

Chapter 8: The Bigger Picture

Two years later, Li Wei had been promoted to Senior Analyst and was managing a portion of his fund’s Asia Pacific allocation. The institutional perspective gave him new appreciation for the ETF structure he’d discovered as a retail investor.

“Liquidity management becomes so much simpler,” he explained to his team during their Monday morning meeting. “Instead of managing positions across eight different Asian markets with varying trading hours and settlement periods, we can adjust our regional exposure through a single Hong Kong-listed ETF.”

His colleague, Jennifer, who had recently been hired from BlackRock in New York, nodded. “In the US, we’re seeing institutions increasingly use ETFs as building blocks for more complex strategies. Your Mirae Asset fund is essentially giving retail investors access to institutional-quality regional exposure.”

Realizing the importance of market structure, Li Wei came to understand something profound: ETFs were levelling the playing field between institutional and retail investors. The same index methodology, the same underlying holdings, the same trading mechanisms – the only difference was scale.

Epilogue: The Philosophy

Five years after discovering that first ETF, Li Wei stood in his new apartment on Orchard Road, looking out at Singapore’s skyline. His investment portfolio had grown substantially, but more importantly, his investment philosophy had matured.

His Asia Pacific ETF had weathered multiple crises – COVID-19 lockdowns, supply chain disruptions, geopolitical tensions, interest rate cycles. Through each episode, the broad diversification and professional management had provided stability while maintaining growth exposure.

He pulled up his investment tracking app one final time. The Mirae Asset ETF now represented 35% of his total portfolio – not just for its Asia Pacific exposure, but because it embodied everything he’d learned about successful investing: diversification, cost efficiency, behavioral discipline, and long-term thinking.

His phone buzzed with a message from Sergeant Kumar: “Li Wei, thanks for the ETF recommendation years ago. Just hit my target allocation for regional exposure. Amazing how simple it became once I stopped overthinking it.”

Li Wei smiled and typed back: “That’s the real power of ETFs – they make good investing accessible to everyone.”

As the sun set over Marina Bay, Li Wei reflected on the journey from complex, expensive country-specific investing to elegant, efficient regional exposure. The ETF hadn’t just simplified his portfolio; it had taught him that sometimes the best investment decisions are the ones that make your life simpler, not more complex.

The Asia Pacific region is expected to continue its growth story, driven by demographics, technology adoption, infrastructure development, and rising consumer spending. Through his ETF, Li Wei would continue to participate in that story, one dividend payment and one market appreciation at a time.

Investment Lessons from Li Wei’s Journey

Simplicity Beats Complexity: Li Wei’s shift from multiple country-specific ETFs to a single regional fund improved both returns and peace of mind.

Cost Matters: The 0.18% fee versus his previous 0.72% weighted average saved significant money over time, which compounded into meaningful wealth creation.

Diversification Works: Broad regional exposure provided better risk-adjusted returns than concentrated country bets.

Behavioural Discipline: The ETF structure reduced the temptation to over-trade and second-guess allocation decisions.

Long-term Perspective: Focusing on multi-year themes rather than democratized short-term performance improvement has led to better investment outcomes.

Accessibility: ETFs democratized access to institutional-quality investment strategies for individual investors.

Li Wei’s story illustrates how ETFs have transformed modern investing, making sophisticated strategies accessible while encouraging disciplined, long-term thinking. For Singaporean investors, regional ETFs like the Mirae Asset fund represent an efficient bridge to Asia-Pacific growth opportunities.

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