iShares MSCI All Country Asia ex Japan ETF (AAXJ)
Summary
AAXJ Chart
AAXJ: The Overdiversified To Underdiversified Shift May Not Be A Bad Thing (Upgrade)
I revisit the iShares MSCI All Country Asia ex Japan ETF (AAXJ) after my initial Hold rating in March 2025. AAXJ was previously criticized for overdiversification, high fees for a passive ETF, and significant tracking error versus its benchmark. Despite volatility, AAXJ has outperformed the S&P 500 since September, reversing prior relative performance.
Are Asian ETFs in Jeopardy Amid the War & Tariff Double Whammy?
Asian ETFs are under pressure as surging oil prices and new U.S. tariffs trigger market turmoil and sharp fund outflows across the region.
Why AAXJ Is A Better ETF Than AIA
The iShares MSCI All Country Asia ex Japan ETF offers superior diversification across Asia ex Japan, with 915 holdings and meaningful exposure to India and Southeast Asia. The iShares Asia 50 ETF is highly concentrated, with 51% in four tech stocks, exposing investors to significant concentration and the "AI trade" risk. AAXJ's broader sector and geographic mix, including India's growth, justify its slightly higher 0.72% expense ratio and 20x P/E.
iShares MSCI All Country Asia ex Japan ETF Investors
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| BZ Brandon Zatopek Commonwealth Equity Services LLC | 27,075 | $3.23M | $3.16M | -$68,800.75 | -2.13% |
| RG Rafael Guijarro City National Bank Of Florida /MSD | 1,690 | $201,668 | $197,375.1 | -$4,292.9 | -2.13% |
| NA Nizar Araji National Bank Of Canada /FI/ | 25,517 | $2.33M | $2.9M | $565,788.14 | 24.27% |
 Vaughan Nelson Vaughan Nelson Investment Management LP | 70 | $4,839.51 | $7,750.4 | $2,910.89 | 60.15% |
| AB Anthony Bruccoleri Equitable Holdings Inc. | 1,693 | $198,876.71 | $196,117.12 | -$2,759.59 | -1.39% |
iShares MSCI All Country Asia ex Japan ETF (AAXJ) FAQ
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iShares MSCI All Country Asia ex Japan ETF Profile
| NASDAQ (NMS) Exchange | US Country |
Overview
The fund is designed to offer investors exposure to the equity market performance of a select group of developed and emerging markets in Asia. By investing a minimum of 80% of its assets in securities that either are part of its target index or possess economic characteristics nearly identical to those securities, the fund aims to closely track the performance of its benchmark index. The index itself is a free float-adjusted market capitalization index, which seeks to represent the market performance of companies within ten countries or regions across Asia, encompassing both developed and emerging markets. These markets include China, Hong Kong, India, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan, and Thailand. Through this geographic and economic diversity, the fund provides investors with a unique opportunity to engage with Asia's dynamic equity markets.
Products and Services
- Market Capitalization Index Investment
This product focuses on replicating the performance of a free float-adjusted market capitalization index, which measures the equity market performance across selected developed and emerging Asian markets. The fund allocates at least 80% of its assets to securities that form part of this index or have economic characteristics similar to it, thereby ensuring that investors have a significant exposure to the economic fluctuations and growth patterns of the respective markets.
- Exposure to Developed and Emerging Asian Markets
By targeting investments in countries like China, Hong Kong, India, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan, and Thailand, the fund offers a broad exposure to a mix of both developed and emerging markets in Asia. This strategy allows investors to diversify their portfolios by incorporating the growth potential of emerging markets with the stability of more established ones, effectively balancing risk and reward.
