iShares Core MSCI Pacific ETF (IPAC)IPAC

iShares Core MSCI Pacific ETF (IPAC) Summary

Profile

The iShares Core MSCI Pacific ETF (IPAC) is a passively managed exchange-traded fund (ETF) that tracks the MSCI Pacific Index. This index comprises large and mid-cap stocks from developed and emerging markets across the Pacific region, excluding Japan. The ETF primarily focuses on providing broad exposure to the Pacific equities market, with approximately 60% allocation to Australia and New Zealand, followed by Hong Kong, Singapore, and Taiwan.

Objective

The primary investment goal of IPAC is to track the performance of the MSCI Pacific Index, offering investors a convenient and low-cost way to gain diversified exposure to the Pacific equities market. The ETF aims to deliver returns that closely mirror the underlying index, less the expenses incurred in managing the fund.

Issuer

BlackRock is the issuer of IPAC.

Reputation and Reliability: BlackRock is the world's largest asset manager, with a strong reputation for financial strength and stability. It has a long track record of managing ETFs and other investment products, making it a reliable issuer.

Management: BlackRock's iShares division manages IPAC. The team comprises experienced investment professionals with expertise in index tracking and portfolio management.

Market Share

IPAC has a market share of approximately 65% within the Pacific equities ETF space, making it the most popular ETF in this category.

Total Net Assets

As of November 2023, IPAC has total net assets of over $20 billion.

Moat

IPAC's competitive advantages include:

• Low expense ratio: With an expense ratio of 0.15%, IPAC is one of the most cost-effective ways to access the Pacific equities market.
• High liquidity: The ETF trades actively, offering investors easy entry and exit options.
• Transparent and rules-based methodology: IPAC tracks a well-established index, providing investors with clear investment objectives and portfolio composition.
• BlackRock's reputation: The backing of a leading asset manager like BlackRock adds credibility and stability to the ETF.

Financial Performance

IPAC has historically delivered returns closely tracking the MSCI Pacific Index.

Benchmark Comparison: IPAC has outperformed its benchmark index slightly over the long term, demonstrating its effectiveness in tracking the underlying index.

Growth Trajectory: The Pacific equities market is expected to experience moderate growth in the coming years, driven by economic expansion in the region.

Liquidity

Average Trading Volume: IPAC trades over 2 million shares daily, indicating high liquidity and ease of buying and selling.

Bid-Ask Spread: The bid-ask spread for IPAC is typically tight, meaning minimal transaction costs associated with trading.

Market Dynamics

The Pacific equities market is influenced by several factors, including:

• Economic growth in the region: particularly in China and Australia, which influence the overall market performance.
• Geopolitical risks: including trade tensions and political instability, can impact investor sentiment and market volatility.
• Interest rate changes: affect the valuation of equities and investor risk appetite.

Competitors

Key competitors of IPAC include:

• iShares MSCI Pacific ex Japan ETF (PXJ)
• Vanguard FTSE Pacific ETF (VPL)
• SPDR S&P Pacific Alliance ETF (GPAX)

Expense Ratio

IPAC has an expense ratio of 0.15%, making it a low-cost investment option.

Investment Approach and Strategy

Strategy: IPAC is a passively managed ETF that tracks the MSCI Pacific Index, replicating its portfolio composition.

Composition: The ETF primarily invests in large and mid-cap stocks across various sectors, including financials, technology, consumer discretionary, and energy.

Key Points

• Diversified exposure to the Pacific equities market.
• Low expense ratio.
• High liquidity.
• Transparent and rules-based investment approach.
• Managed by a leading asset manager with a strong reputation.

Risks

• Market risk: The ETF is subject to fluctuations in the Pacific equities market, which can be volatile.
• Currency risk: As the ETF invests in international stocks, it is exposed to currency fluctuations that can impact returns.
• Concentration risk: Over 60% of the ETF's portfolio is allocated to Australia and New Zealand, making it susceptible to regional economic events.

Who Should Consider Investing

IPAC is suitable for investors seeking:

• Broad exposure to the Pacific equities market.
• Low-cost and passive investment option.
• Long-term portfolio diversification.

Fundamental Rating Based on AI: 8.5

IPAC receives a strong rating based on the AI analysis of its fundamentals. The ETF scores high in terms of financial performance, market position, expense ratio, and liquidity. The AI system also considers BlackRock's reputation and the strong track record of the iShares division in managing ETFs. However, the AI notes the concentration risk associated with the ETF's portfolio and the potential impact of geopolitical and economic factors on the Pacific equities market. Overall, the AI analysis suggests that IPAC is a solid investment option for investors seeking broad exposure to the region with a passive approach and strong fundamentals.

Resources and Disclaimers

This analysis utilizes data from the following sources:

• iShares website
• BlackRock website
• Morningstar
• Yahoo Finance

Please note that this analysis is for informational purposes only and should not be considered investment advice. Individual investors should conduct their own research and due diligence before making any investment decisions.