iShares MSCI Pacific ex-Japan Idx (ETF) (EPP)

NetscribeETF (96.17) Submitted: 3/23/07 9:02 AM : Start Price: $44.51 EPP Score: 2.09

iShares MSCI Pacific ex-Japan Index Fund seeks to provide investment results that correspond generally to the price of publicly traded securities in Australia, Hong Kong, Singapore and New Zealand markets. The index is market-cap-weighted, and it normally devotes around 66% of its assets to Australia, 21% to Hong Kong, 10% to Singapore and 2% in New Zealand.


Singapore, a market that posted a GDP growth of 7.9% in 2006, is expected to grow at a rate of 8% in 2007, sounds lucrative for any investor. Coupled with a growth of 6.6%, the financial services sector led the economy to race forward along with other Asian nations. Australian GDP which stood at 3.7% is one of the best among developed industrialized nations. The banking sector is progressing well with a 12.5% credit growth in 2006 and is expected to continue to be a major player in the economic development.


Hong Kong has the largest revenue contribution coming from service sector at nearly 90%. Being the financial as well as the trade & logistic hub of Asia, Hong Kong is a gateway for firms interested to get into mainland China. Real estate management securities returned roughly 30% in 2006 with the figure expected to touch 50% by end of 2007.


The iShares MSCI Pacific ex-Japan Index Fund which enjoyed returns of 26% in the past one year, comprises of 176 securities with 22.9% concentration in Commercial Banks, 16% exposure to Real Estate sector, 10.16% in metals and mining among others.


The fund has enjoyed favorable conditions so far, as Australia has outpaced many of its neighbors in recent years, largely due to the strength of its metals stocks like BHP Billiton which is 6.73% of the fund. Further, it typically has nearly twice as much exposure to financial stocks; because Australia, Hong Kong, and Singapore are full of major banking, real estate other financial companies. Given a bright outlook for the participant nations and sectors, the Fund appears to be a compelling idea.

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