Should You Bet on This Asia-Pacific ETF Today?

Asian markets experienced an uptick in trading on February 12 after U.S. President Donald Trump said on Tuesday that he was open to extending the March 2 deadline for tariffs. The United States and China have been locked in tense trade negotiations that have not yielded breakthroughs in 2019 so far.

A failure to come to an agreement has the potential to ignite an all-out trade war between the world’s two largest economies.

Today, we are going to focus on economies on the periphery in the Asia-Pacific. Although many of these nations have opposed China on the geopolitical stage, they have still relied on a productive trade relationship between the United States and China.

However, this bout of good news has been positive for Asian-focused markets. The Vanguard FTSE Developed Asia Pacific All Cap Index ETF (TSX:VA) rose 0.83% on February 12. Shares are only up 1.8% in 2019 so far. The fund dropped 6.4% in a tumultuous 2018.

The country with the most exposure on this ETF is Japan, which represents over 50% of the benchmark. Australia, Korea, and Hong Kong are the next three largest allocations.

The two largest caps on the index are Samsung and Toyota Motor Corp.

The ETF is a risky pick up as trade negotiations heat up ahead of the March deadline. To add to that many of the developed economies with large exposure, such as Japan and Australia, are combatting anemic growth on the domestic level.