Diversifying into Asian stocks? Here’s a new Exchange Traded Fund (ETF) to watch

This post was created in partnership with Nikko Asset Management Asia Limited. All views and opinions expressed in this article are Beansprout's objective and professional opinions. 

What happened?

I’ve been dollar-cost averaging into US ETFs for a few years. 

But with the recent tariffs and geopolitical uncertainty, I’m starting to reevaluate my exposure. 

On Reddit threads like r/SingaporeFI, I’m seeing more people ask the same question: Is it time to diversify beyond US markets?

Among the areas I’m looking into is Asia. 

Granted, Asian countries are among those affected by US tariffs. But beyond the uncertain near-term outlook, the long-term fundamentals in many parts of Asia still seem attractive to me.

That’s why the recent launch of the Amova MSCI AC Asia ex Japan ex China Index ETF by Nikko Asset Management on Singapore Exchange (SGX) caught my eye. 

I decided to take a closer look at this ETF and whether it might be one way to rebalance, diversify, and stay invested in Asia’s long-term potential.

What is the Amova MSCI AC Asia ex Japan ex China Index ETF?

Launched by Nikko Asset Management, the Amova MSCI AC Asia ex Japan ex China Index ETF tracks the MSCI AC Asia ex Japan ex China Index, which captures large- and mid-cap companies in both developed and emerging markets in Asia, excluding Japan and China.1

It is the first ETF on SGX to track this index, offering investors a unique opportunity to tap into Asian markets with a more focused and flexible approach.

The ETF automatically reinvests dividends, which means that I can compound my investments over time.

Key features of the Amova MSCI AC Asia ex Japan ex China Index ETF

#1 – Exposure to the region’s high-growth leaders

If you’re looking to diversify into Asian markets easily, the Amova MSCI AC Asia ex Japan ex China Index ETF gives investors access to major economies in Asia. 

As of 31 March 2025, the top 3 holdings of the index are India (32.72%), Taiwan (29.78%), and South Korea (15.89%). 

In terms of sectors, the index comprises Information Technology (33.56%), Financials (25.5%), and Industrials (8.82%) as of 31 March 2025. 

Key holdings in the index include Taiwan Semiconductor Manufacturing Co. (TSMC) at 15.19%, Samsung Electronics at 4.22%, HDFC Bank at 2.72%, Reliance Industries at 2.04%, and ICICI Bank at 1.87%.

This reflects a strong tilt toward innovation, technology megatrends, and rising consumption across Asia.

#2 – A more targeted approach to Asia

What caught my eye was that the Amova MSCI AC Asia ex Japan ex China Index ETF deliberately excludes China and Japan. 

These are Asia’s two largest economies, and they often dominate traditional regional funds. 

This is because their sheer size can skew the allocation of many Asia-focused ETFs, leaving investors overexposed to them and underexposed to the rest of the region.

By removing them from the equation, this ETF allows investors to take a targeted exposure to Asia, giving weight to markets like India, Taiwan, and South Korea, and ASEAN countries. 

With this ETF, I can allocate more deliberately within Asia, reducing unintended concentration risk. 

And I can still choose to gain exposure to China and Japan through separate funds if desired.

#3 – Designed for accessibility and efficiency

One of the key reasons I’ve always gravitated toward ETFs is their simplicity.

The Amova MSCI AC Asia ex Japan ex China Index ETF makes it easy for retail investors like me to get broad exposure to multiple Asian markets in a single trade, without the usual complications of investing overseas.

I don’t have to research and buy individual stocks across multiple countries, or deal with the regulatory nuances and currency conversions for markets like India or South Korea. 

This ETF gives me instant diversification with a low total expense ratio, capped at 0.60% per annum (Source: Nikko AM, Mar 25), and it is listed on the SGX.

Like all ETFs, it trades just like a regular stock, which means it offers real-time pricing, liquidity, and full transparency. You can buy or sell it during SGX market hours. 

What is the performance of the MSCI AC Asia ex Japan ex China Index?

The Amova MSCI AC Asia ex Japan ex China Index ETF tracks the MSCI AC Asia ex Japan ex China Index. 

While past performance is not indicative of future results, as of 31 March 2025, the index delivered annualised 3-year return of 1.07% p.a, 5-year return of 11.59% p.a, 10-year return of 5.49% p.a, and since inception in 2008 of 10.27% p.a.

How can I access the Amova MSCI AC Asia ex Japan ex China Index ETF?

The Amova MSCI AC Asia ex Japan ex China Index ETF is listed on the Singapore Exchange (SGX) and can be traded under two different stock codes:

• A93: Traded in Singapore Dollars (SGD)
• A94: Traded in US Dollars (USD)

This dual-currency listing offers investors the flexibility to choose their preferred trading currency. 

The ETF is structured with a minimum board lot size of 1 share. This makes the ETF accessible to beginner investors or retail investors who intend to invest in it with smaller amounts. 

To invest in this ETF, you can place orders through your brokerage account, just as you would with any other stock listed on the SGX. 

The ETF trades during standard SGX market hours. 

What is the management fee of the ETF?

The management fee of the Amova MSCI AC Asia ex Japan ex China Index ETF is 0.50% per annum.

The total expense ratio (which already includes the management fee) is capped at 0.60% per annum, which means, any expenses beyond 0.60% per annum will be absorbed by the fund manager and not end investors like you and me (Source: Nikko AM, Mar 25). 

What are the risks and considerations?

​Investing in the Amova MSCI AC Asia ex Japan ex China Index ETF offers exposure to dynamic Asian markets, but it's essential to be aware of certain risks:

#1 – Global economic uncertainty

Asian markets, both developed and emerging, tend to be exposed to global economic fluctuations. 

Recent escalations in trade tensions, such as the U.S. imposing significant tariffs on various countries, have led to heightened market volatility.

So it’s important to assess your risk appetite and whether diversifying into Asian markets aligns with your financial goals and comfort level. 

#2 – Currency risk

While the ETF is listed on the SGX in both SGD (A93) and USD (A94), the underlying assets are denominated in various local currencies. 

This exposes investors to currency risk, as fluctuations in exchange rates can affect the value of the ETF. 

For example, if the Indian Rupee or South Korean Won depreciates against your chosen trading currency, the returns from those markets may be diminished when converted back to SGD or USD. 

Additionally, some Asian currencies may experience higher volatility. 

What would Beansprout do?

The Amova MSCI AC Asia ex Japan ex China Index ETF offers exposure to Asia in a targeted and controlled way. 

By focusing on high-growth markets like India, Taiwan, and South Korea, while deliberately excluding the heavyweight economies of China and Japan, the ETF provides more balanced exposure to regions with robust economic prospects.

However, it's essential to remain mindful of inherent risks, including current global economic uncertainties and currency fluctuations. 

Learn more about the Amova MSCI AC Asia ex Japan ex China Index ETF here.

Special Promo

If you’re interested in investing in the new Amova MSCI AC Asia ex Japan ex China Index ETF, here’s how you can do so and get rewarded for it!

One of the best ways to invest in ETFs like the one we just mentioned is via FSMOne, who offer a flat processing fee of $3.80 when investing ETFs via the SGX, and 0% Processing Fees when you use their ETF Regular Savings Plan (ETF RSP) feature.

From 19th May till 30th May 2025 (the “Promotional Period”), FSMOne and Nikko AM is offering a special reward where if you invest at least S$8,000 in any one or a combination of these Nikko AM ETFs to receive S$10 cashback. If you invest more than S$10,000, you receive S$20 cashback! In order to qualify, you will need to hold the investment for one month after the end of the promotional period. Terms and Conditions Apply!

Terms and conditions apply. 

¹ This ETF aims to track as closely as possible, before fees and expenses, the returns of the MSCI AC Asia ex Japan ex China Index (the “Index”). The MSCI AC Asia ex Japan ex China Index aims to track the performance of large and mid-cap companies in Developed Markets countries (excluding Japan) and Emerging Markets countries (excluding China) in Asia.

Important Information: 

The Fund is a sub-fund of Nikko AM Asia Limited VCC, an umbrella variable capital company incorporated in Singapore ("the Company"). The Manager of the Fund is Nikko Asset Management Asia Limited (“Nikko AM Asia”).

This document is purely for informational purposes only with no consideration given to the specific investment objective, financial situation and particular needs of any specific person. It should not be relied upon as financial advice. Any securities mentioned herein are for illustration purposes only and should not be construed as a recommendation for investment. You should seek advice from a financial adviser before making any investment. In the event that you choose not to do so, you should consider whether the investment selected is suitable for you. Investments in funds are not deposits in, obligations of, or guaranteed or insured by the Company or Nikko AM Asia.

Past performance or any prediction, projection or forecast is not indicative of future performance. The Fund or any underlying fund may use or invest in financial derivative instruments. The value of Shares and income from them may fall or rise. Investments in the Fund are subject to investment risks, including the possible loss of principal amount invested. You should read the relevant prospectus (including the risk warnings) and product highlights sheet of the Fund, which are available and may be obtained from appointed distributors of Nikko AM Asia or our website (www.nikkoam.com.sg) before deciding whether to invest in the Fund.

The information contained herein may not be copied, reproduced or redistributed without the express consent of Nikko AM Asia. While reasonable care has been taken to ensure the accuracy of the information as at the date of publication, Nikko AM Asia does not give any warranty or representation, either express or implied, and expressly disclaims liability for any errors or omissions. Information may be subject to change without notice. 

Nikko AM Asia accepts no liability for any loss, indirect or consequential damages, arising from any use of or reliance on this document. This advertisement has not been reviewed by the Monetary Authority of Singapore.

The performance of the ETF’s price on the Singapore Exchange Securities Trading Limited (“SGX-ST”) may be different from the net asset value per Share of the ETF. The ETF may also be suspended or delisted from the SGX-ST. Listing of the Shares does not guarantee a liquid market for the Shares. Investors should note that the ETF differs from a typical unit trust and Shares may only be created or redeemed directly by a participating dealer in large creation or redemption Shares. 

The funds or securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities or any index on which such funds or securities are based. The prospectus contains a more detailed description of the limited relationship MSCI has with Nikko AM Asia and any related funds.

Nikko AM Asia Limited VCC. Registration Number T21VC0223L.