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Analyzing Vanguard Pacific Stock Index’s Portfolio Allocation

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Vanguard Pacific Stock Index Fund overview

The Vanguard Pacific Stock Index Fund provides exposure to the developed countries of the Asia-Pacific region. The fund provides exposure to about 2,150 stocks, about a fourth of the non-US equity market.

The VPACX is an index fund, unlike other funds in this review that are actively managed. The fund is benchmarked to the FTSE Developed Asia Pacific All Cap Index. Since the index invests only in developed economies of the region, the fund’s exposure is restricted to Japan, Australia, South Korea, Hong Kong, Singapore, and New Zealand.

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The fund’s assets were spread across 2,231 holdings as of May 2016, and it was managing assets worth $5.3 billion at the end of May, making it the largest fund by asset size among the eight funds in this review. As of May, its equity holdings included Tokio Marine Holdings (TKOMY), Nissan Motor (NSANY), Mitsui & Co. (MITSY), Nomura Holdings (NMR), and FUJIFILM Holdings (FUJIY).

Portfolio changes in the Vanguard Pacific Stock Index Fund

The VPACX is an index tracking fund. Thus, when we talk about its sectoral composition, essentially, we’re talking about the composition of the underlying benchmark. Unlike other funds in this review, the VPACX cannot actively change its stock-level composition. It can do so only when the composition of the underlying benchmark changes.

Financials is the most invested sector, forming a quarter of the portfolio. Industrials is a distant second, closely followed by consumer discretionary at the third position. These three sectors combined form 59% of the fund’s assets.

While the benchmark FTSE Developed APAC All Cap Index comprises of 2,208 stocks, the assets of the VPACX are spread across 2,231 stocks as of May. Among the six developed nations that the fund invests in, Japan commands 59% of the portfolio. Australia is a distant second at 17% while South Korea is third with 11% exposure.

With this portfolio positioning, how has the Vanguard Pacific Stock Index Fund – Investor Shares (VPACX) fared in 2016? Let’s look at that in the next article.

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