Asia ETFs: How to Choose an ETF for Asian Equities

An Asia ETF is an exchange-traded fund that gives investors exposure to Asian equities in a single, listed product. The label covers very different portfolios, though: some Asia ETFs include Japan and Australia, others exclude Japan, and others hold only emerging Asia or South-East Asia. This guide explains the main types of Asia ETFs, what drives their returns and what to check before choosing one.

What Is an Asia ETF?

An Asia ETF is a fund listed on a stock exchange that tracks an index of Asian companies, usually market-capitalisation weighted, so that investors can buy a diversified basket of Asian stocks in one trade. Like any ETF, it is bought and sold during exchange hours, and its price stays close to the value of its holdings through the creation and redemption mechanism.

The index behind the ETF decides almost everything: which countries are included, how much weight each country and sector gets, and how the portfolio changes over time. For investors in Europe, Asia ETFs are typically offered as UCITS funds. How broad emerging markets ETFs work, and how MSCI and FTSE index families differ, is covered in our guide Emerging Markets ETFs: How to Choose an ETF for Emerging Market Equities. This article focuses on Asia-only products.

Types of Asia ETFs

Asia ETFs differ mainly by region definition. The same word “Asia” can mean very different country mixes:

• Asia Pacific ETF: includes developed markets such as Japan and Australia alongside emerging Asia. Japan is often the largest single country.
• Asia ex Japan ETF: excludes Japan and usually Australia, focusing on the rest of developed and emerging Asia.
• Emerging Asia ETF: holds only the emerging markets of Asia, often tracking an index such as MSCI EM Asia.
• South-East Asia or ASEAN ETF: covers smaller markets such as Indonesia, Malaysia, the Philippines, Singapore and Thailand.
• Single-country ETF: tracks one market only, for example China, India or Vietnam.

Asia ex Japan: what is inside?

The MSCI AC Asia ex Japan Index shows how concentrated a broad Asia ETF can be. It covers large and mid caps in 2 developed markets (Hong Kong and Singapore) and 8 emerging markets (China, India, Indonesia, Korea, Malaysia, the Philippines, Taiwan and Thailand). As of 30 September 2026, Taiwan, South Korea, China and India together made up roughly 90% of the index (MSCI factsheet). An investor buying an “Asia” ETF of this type is therefore mostly buying four markets — and a large weight in technology and semiconductor companies.

How to Choose an Asia ETF

Choosing an Asia ETF starts with the index, not the product name. The following criteria help compare products:

• Region and index: Asia Pacific, Asia ex Japan, Emerging Asia or ASEAN — and which index provider. Check the country weights in the latest factsheet.
• Concentration: how much the top countries, sectors and the ten largest companies weigh in the portfolio.
• Costs: the total expense ratio, but also trading spreads and tracking difference, which show how closely the ETF followed its index after all costs.
• Replication: physical (full or sampled) or synthetic via swaps.
• Size and liquidity: fund assets and trading volume on the exchange you use.
• Share class and currency: listing currency, accumulating or distributing, and whether a currency-hedged class exists.
• Domicile and structure: for European investors usually a UCITS ETF; domicile can affect withholding tax on dividends.

There is no single “best Asia ETF” for every investor. The right product depends on whether the investor already holds Japan or a global emerging markets fund, and on how much concentration in a few markets they are willing to accept.

Risks of Asia ETFs

Asia ETFs carry the general risks of equity investing plus several region-specific ones. The most important is concentration: a few countries and a handful of large technology companies drive a large part of the result. Currency risk comes from the many local currencies against the investor’s home currency. Political and regulatory risk includes policy changes, capital controls and geopolitical tension in the region. Finally, an index ETF owns companies because of their size, not because of their prospects, and it cannot avoid overvalued markets or sectors.

Where Vietnam Fits: Index Coverage and Its Limits

Broad Asia ETFs often leave out some of the region’s fastest-growing markets. Vietnam is a good example: it is not part of the MSCI AC Asia ex Japan Index, so a typical Asia ex Japan ETF holds little or no Vietnamese equities. FTSE Russell has announced Vietnam’s upgrade from Frontier to Secondary Emerging market status, which AQUIS Capital fund manager Mario Timpanaro discussed in FTSE upgrades Vietnam: “a milestone with a signal effect”. Inclusion in indices may change the picture over time, but today investors who want meaningful Vietnam exposure usually need a dedicated product.

Dedicated Vietnam ETFs exist, but they face the same structural limits as other index products in a smaller market, such as foreign ownership limits and concentration in a few large caps — see Vietnam ETF: Access to a Growing Market.

Asia ETF or Active Asia Fund?

An Asia ETF offers low-cost, transparent market exposure; an actively managed fund aims to select companies based on research rather than index weight. In Asia, where markets differ widely in size, liquidity and governance, the gap between index weight and investment opportunity can be large. The case for diversifying across Asian markets with active management is discussed in Emerging Asia Funds: Why Diversification Across Asia Matters.

Many investors combine both: a broad Asia ETF as a core holding and an active fund for markets the index covers poorly. For Vietnam, AQUIS Capital manages the Lumen Vietnam Fund, an actively managed UCITS equity fund investing in listed Vietnamese companies.

Frequently Asked Questions About Asia ETFs

What is the difference between an Asia Pacific ETF and an Asia ex Japan ETF?

An Asia Pacific ETF usually includes Japan and Australia, which can make up a large share of the portfolio. An Asia ex Japan ETF excludes Japan and focuses on the rest of Asia, where China, Taiwan, South Korea and India dominate.

Is an Asia ETF the same as an emerging markets ETF?

No. A global emerging markets ETF also holds Latin America, Eastern Europe, the Middle East and Africa. An Asia ETF holds only Asian markets, and some versions include developed markets such as Japan, Hong Kong or Singapore.

Which countries dominate Asia ex Japan ETFs?

In the MSCI AC Asia ex Japan Index, Taiwan, South Korea, China and India together accounted for roughly 90% of the index as of 30 September 2026. Weights change over time, so investors should check the current factsheet.

Do Asia ETFs include Vietnam?

Most broad Asia ETFs hold little or no Vietnamese equities, because Vietnam is not part of the main MSCI Asia indices. Investors seeking Vietnam exposure usually use a dedicated Vietnam ETF or an actively managed Vietnam fund.

What should I check before buying an Asia ETF?

Check the index and its country weights, total costs and tracking difference, replication method, fund size, listing currency and share class, and the fund’s domicile. These factors matter more than the word “Asia” in the product name.

Read more about AQUIS Capital and the team behind it, explore the AQUIS Capital fund range, or contact the team with your questions.

This content is for general information only and is not financial, investment, tax or legal advice. Investments carry risk, including the possible loss of capital. Consult a licensed professional before making decisions.