The fifth and final world region to be considered in the index fund top 5 holdings series is the Pacific Ex-Japan index fund. This fund tracks an index which represent the biggest companies in Australia, Hong Kong, New Zealand, and Singapore Oceania region. This fund excludes Japan which has its own index fund as detailed here. This fund employs a “passive management” investment style, a strategy which is designed to track the performance of the index by investing in all, or a representative sample of the securities of which the index is composed of.
Pacific Ex-Japan region economies and asset allocation
As a UK based investor I am particularly interested in these economies for several reasons. As the region is a significant distance away the correlation between my home economy and the region’s economy is not as high as for example with the European Union (EU). This adds some diversification to the portfolio. Additionally, Pacific-Ex Japan region economies are dominated by other sectors such as electronics and mining which are not as dominant locally in the UK market.
Here are the top 5 holdings in a typical index fund of the region:
Commonwealth Bank of Australia (CBA.AX)
BA is an Australian multinational bank which offers a range of financial services including retail, business and institutional banking, wealth management, insurance, home loans and consumer finance. The company was founded in 1911 and is among the “big four” Australian banks.
Commonwealth Bank makes up 6.32% of the Pacific Ex-Japan index fund and has a projected dividend yield of a 7.26%. The company’s 10 year annual return is 9.08%.
Latest 5 year returns for Commonwealth Bank stocks are:
AIA Group (AI)
AIA, founded in 1919, is the largest independent pan-Asian life insurance group. 100% focused in the Asia Pacific region, AIA operates in 18 countries in the region. AIA is also the largest company listed on the Hong Kong stock exchange and it is the second largest life insurer in the world. Products offered by the company include life, health and accident insurance, pension services, savings plans and employee benefits.
AIA makes up 5.29% of the Pacific Ex-Japan index fund and has a projected dividend yield of a 1.27%. The company’s 3 year annual return is 14.38%.
Latest 3 year returns for AIA stocks are:
Westpac Banking Corporation (WBC.AX)
Westpac, a financial services provider based in Sydney, is one of the “big four” Australian banks. The Company provides a range of banking and financial services in markets, including consumer, business and institutional banking and wealth management services. Westpac has origins dating back 200 years to 1817 and is the second largest bank by assets in Australia and New Zealand. It was founded as the Bank of New South Wales (BNSW), the first bank in Australia.
Westpac makes up 4.70% of the Pacific Ex-Japan index fund and has a projected dividend yield of a 5.93%. The company’s 10 year annual return is 5.28%.
Latest 5 year returns for Westpac stocks are:
Australia and New Zealand Banking Group Ltd (ANZ.AX)
ANZ, was founded in 1835 and is headquartered in Melbourne, Australia. It is one of the “big four” Australian banks. The company’s main businesses are retail and commercial banking. In addition to Australia and New Zealand, ANZ operates globally in 34 other countries.
ANZ makes up 3.78% of the Pacific Ex-Japan index fund and has a projected dividend yield of a 7.96%. The company’s 10 year annual return is 5.59%.
Latest 5 year returns for ANZ stocks are:
National Australia Bank Ltd (NAB.AX)
NAB is the fourth largest bank in Australia and 21st largest in the world. The company was founded in 1982 and is headquartered in Melbourne. Its business segments include business and private banking with a focus on small to medium enterprises (SME).
NAB makes up 3.69% of the Pacific Ex-Japan index fund and has a projected dividend yield of a 9.56%. The company’s 10 year annual return is 3.47%.
Latest 5 year returns for NAB stocks are:
These are the top 5 holdings of an index fund with Pacific Ex-Japan company stocks. As you can see from the typically high dividend yields of these companies it is indication that globally diversifying your investment portfolio can reap benefits.
Above are the top five holdings in the Pacific region excluding Japan index fund in my portfolio. For overviews of the top 5 companies in typical index funds for other world regions click below: