Why the BetaShares ASIA ETF is 50% below its former glory

When it comes to ASX exchange-traded funds (ETFs), it can be argued that the BetaShares Asia Technology Tigers ETF (ASX: ASIA) hasn’t been the best performer of late.

Sure, ASIA units have gained a healthy 1.33% so far today. But this tech-heavy ETF remains down a painful 27.3% or so over 2022 thus far. It’s also down by more than 34% over the past 12 months. And a whopping 51.3% off of the all-time high of over $14 a unit that we saw back in February 2021.

In stark contrast, the ASX’s most popular index fund, the Vanguard Australian Shares Index ETF (ASX: VAS) is only down by 9.62% over the past 12 months. The tech-heavy BetaShares NASDAQ 100 ETF (ASX: NDQ), which is far more similar to ASIA, has lost 10.2% over the same period.

So what’s gone so wrong with the ASIA ETF?

So this fund is designed to be an Asia-based alternative to the US NASDAQ Index. According to its provider, ASIA comprises “the 50 largest technology and online retail stocks in Asia (ex-Japan)”.

Its largest weighting is towards China at almost 54% of the underlying portfolio. But other countries like Taiwan, South Korea, India and Hong Kong are also represented.

As one might expect, ASIA is dominated by Asian tech companies, These include Taiwan Semiconductor Manufacturing Company (TSMC), Chinese e-commerce giants Alibaba, JD.com and Tencent, Samsung Electronics and Meituan.

Even though ASIA has 39 underlying holdings, the ETF’s portfolio is rather concentrated as well. Alibaba and TSMC make up more than 20% of ASIA’s total weighted holdings alone. Thrown in Samsung and Tencent and we’re at almost 40%.

So if we look at the performance of these top holdings, we can probably understand why ASIA has had such a tough time of late.

TSMC shares are down a painful 31% year to date so far, probably thanks to the geopolitical tensions across the Taiwan Straight.

Alibaba shares are also down by 21.4% over this year. Samsung shares have lost just over 24%. Tencent has given up a notable 34% of its value.

So with these moves in mind, it’s not hard to see why the BetaShares Asia Technology Tigers ETF has had such a difficult time of late. No doubt investors will be hoping the tide turns soon.

The ASIA ETF charges a management fee of 0.67% per annum.

The post Why the BetaShares ASIA ETF is 50% below its former glory appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Taiwan Semiconductor Manufacturing. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BETANASDAQ ETF UNITS, JD.com, and Taiwan Semiconductor Manufacturing. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended BetaShares Asia Technology Tigers ETF and JD.com. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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