A passive ETF tracking the MSCI Pacific Index, holding large-, mid-, and small-cap stocks from five developed markets — Japan, Australia, Hong Kong, Singapore, and New Zealand — on a market-cap-weighted basis. It offers core diversified exposure across the developed Asia-Pacific region.

It is well suited for long-term investors seeking broad, low-cost diversification across developed Asia-Pacific equity markets outside the United States.

The ETF was launched in 2014 by BlackRock (iShares) and is managed using a passive (index-tracking) approach.

It holds the constituents of the MSCI Pacific Index in proportion to their market-cap weights to track the performance of the developed Asia-Pacific equity market. Japan accounts for more than half of the weighting, followed by Australia, with Hong Kong, Singapore, and New Zealand making up the remainder. Regular rebalancing is conducted in line with the index committee's schedule.

• Comprehensive coverage of five developed Asia-Pacific countries in a single product
• Low expense ratio reduces the cost burden of long-term holding

Size and Cost

Assets under management (AUM) stand at $2.7B, with a total expense ratio of 0.09% annually.

Within the same category, VPL is a larger fund that tracks a different Pacific index, resulting in a somewhat different index composition, and also carries a lower expense ratio. Both ETFs share a Japan-heavy structure, but differences in the tracking index can lead to variations in constituent holdings and weightings.

The developed Asia-Pacific market is influenced by currency movements such as the Japanese yen and Australian dollar, as well as by correlations with the Chinese economy. Expectations of improved corporate governance in Japan's stock market and Australia's resource-export environment have shaped regional market dynamics.

In an environment where demand for diversification outside the United States is growing, investor interest in Asia-Pacific ETFs continues, and a weakening dollar tends to have a positive impact on translated returns.

Broad country diversification and a low expense ratio are key strengths, while concentration in Japan and currency exposure are the main risks.

In the table, VPL is a direct comparable that tracks a different Pacific index, offering similar regional exposure while carrying a lower expense ratio. AIA focuses on the 50 largest companies in Asia and can be considered for investors seeking a more concentrated exposure, while EZU is a eurozone developed-markets ETF targeting a different region. ILF is a Latin America ETF that can be reviewed separately for emerging-markets diversification. For those looking to broaden the scope to the wider Asia-Pacific region (including emerging markets), broad ETFs such as AAXJ are also worth considering alongside.

Here are the key points to review before investing in IPAC. Although it is an ETF that diversifies across developed Asia-Pacific markets, it is important to verify in advance the concentration in Japan, exposure to multiple currency fluctuations, and expense-ratio comparisons.

The primary risks are concentrated exposure to Japan alone and currency fluctuations across multiple currencies. Asia-related geopolitical risks or a slowdown in China's economy could affect the Hong Kong and Singapore allocations.

It is a core ETF suitable for long-term investors seeking low-cost diversification across developed Asia-Pacific equity markets. It is advisable to compare it with VPL, a same-region alternative, and review differences in index composition and expense ratio before making a selection.