Category: Technology

Key Highlights

  • Five ASX-listed Asia-focused ETFs — iShares Asia 50 ETF (ASX:IAA), Fidelity Asia Active ETF (ASX:FASI), Vanguard FTSE Asia ex Japan Shares index ETF (ASX:VAE), Abrdn Sust Asian Opportunities Active ETF (ASX:ASAO) and Platinum Asia Fund Complex ETF (ASX:PAXX) — all hold Taiwan Semiconductor Manufacturing among their top three positions.
  • Weightings to Taiwan Semiconductor Manufacturing range from 28.47 per cent in iShares Asia 50 ETF (ASX:IAA) down to 5.30 per cent in Platinum Asia Fund Complex ETF (ASX:PAXX), reflecting the difference between concentrated and broadly diversified approaches.
  • Fund sizes across the group range from iShares Asia 50 ETF (ASX:IAA) at $1.71 billion down to Abrdn Sust Asian Opportunities Active ETF (ASX:ASAO) at $1.63 million.
  • Three of the five funds are actively managed — FASI, ASAO and PAXX — while IAA and VAE apply passive, index-tracking approaches.

For investors looking to gain exposure to Asia's semiconductor and technology manufacturing base through the ASX, a cluster of Exchange-traded funds provide differing routes to companies such as Taiwan Semiconductor Manufacturing, Samsung Electronics and SK hynix. iShares Asia 50 ETF (ASX:IAA), Fidelity Asia Active ETF (ASX:FASI), Vanguard FTSE Asia ex Japan Shares Index ETF (ASX:VAE), Abrdn Sust Asian Opportunities Active ETF (ASX:ASAO) and Platinum Asia Fund Complex ETF (ASX:PAXX) each hold Taiwan Semiconductor Manufacturing among their largest positions, though the funds differ substantially in size, management style, sector tilt and the extent of that concentration.

iShares Asia 50 ETF (ASX:IAA)

iShares Asia 50 ETF (ASX:IAA) is a passively managed fund tracking the S&P Asia 50 Net TR Index, with a fund size of $1.71 billion, the largest of the five funds reviewed here. Taiwan Semiconductor Manufacturing represents 28.47 per cent of the portfolio, the heaviest single-stock weighting among the group, with Samsung Electronics adding a further 14.23 per cent and SK hynix 10.14 per cent. Technology as a whole accounts for 64.72 per cent of the fund, and Taiwan and South Korea combined make up close to 70 per cent of geographic exposure. The fund carries a management fee of 0.29 per cent and reported a Turnover ratio of just 0.49 per cent, consistent with its passive index-tracking mandate.

Fidelity Asia Active ETF (ASX:FASI)

Fidelity Asia Active ETF (ASX:FASI) takes an actively managed approach, with Taiwan Semiconductor Manufacturing as its largest holding at 13.24 per cent, a smaller weighting than IAA's but still the top position in the fund. The fund's technology allocation of 42.38 per cent is lower than IAA's, with a more even spread across financial services, consumer cyclical and basic materials. FASI holds a more concentrated portfolio of 35 companies and carries a management fee of 1.15 per cent, reflecting its active mandate. Geographic exposure is led by China at 34.60 per cent, followed by Taiwan at 17.93 per cent.

Vanguard FTSE Asia ex Japan Shares Index ETF (ASX:VAE)

Vanguard FTSE Asia ex Japan Shares Index ETF (ASX:VAE) provides a considerably more diversified route to the same underlying stock, holding Taiwan Semiconductor Manufacturing at a 15.22 per cent weighting across a portfolio of 1,783 companies, by far the largest holding count among the five funds. This broad Diversification means the top 10 positions account for just 38.31 per cent of the fund, compared with much higher concentrations in the other funds discussed here. VAE carries a management fee of 0.40 per cent and a low turnover ratio of 2.07 per cent, in keeping with its passive index-tracking design.

Abrdn Sust Asian Opportunities Active ETF (ASX:ASAO)

Abrdn Sust Asian Opportunities Active ETF (ASX:ASAO) is a considerably smaller, actively managed fund with a fund size of $1.63 million. Taiwan Semiconductor Manufacturing is its largest holding at 18.43 per cent, and the fund carries one of the heaviest technology weightings among the group at 51.50 per cent. ASAO applies a sustainability-oriented active management approach and carries a management fee of 1.18 per cent, the second-highest among the funds compared here, with a turnover ratio of 31.09 per cent.

Platinum Asia Fund Complex ETF (ASX:PAXX)

Platinum Asia Fund Complex ETF (ASX:PAXX) holds Taiwan Semiconductor Manufacturing at a comparatively modest 5.30 per cent weighting, the lowest among the five funds, consistent with a more actively rotated and less concentrated approach to stock selection. The fund reported a turnover ratio of 304.79 per cent, considerably higher than any other fund in this comparison, and detailed sector or geographic breakdowns were not disclosed at the time of reporting. PAXX carries a management fee of 1.13 per cent and held a fund size of $275.45 million.

Conclusion

For investors seeking ASX-listed exposure to Taiwan Semiconductor Manufacturing, Samsung Electronics and SK hynix, the choice between iShares Asia 50 ETF (ASX:IAA), Fidelity Asia Active ETF (ASX:FASI), Vanguard FTSE Asia ex Japan Shares Index ETF (ASX:VAE), Abrdn Sust Asian Opportunities Active ETF (ASX:ASAO) and Platinum Asia Fund Complex ETF (ASX:PAXX) largely comes down to how concentrated an investor wants that exposure to be, and whether a passive or actively managed structure is preferred. IAA and ASAO carry the heaviest single-stock and sector concentration, VAE spreads exposure across close to 1,800 companies, and FASI and PAXX sit between these extremes with more actively rotated portfolios.