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How to get exposure to the best, fast-growing Asian shares

When regular Aussie investors think about investing it’s normally ASX shares, US shares or global-facing exchange-traded funds (ETFs).

But, Asia has plenty of fast-growing businesses that can rival the best growth shares in the western world.

Those Asian shares aren’t listed directly on the ASX. So how are we meant to get exposure to them? Well, there are some investments with diverse holdings that do give a small amount of exposure to Asian shares like Magellan Global Trust (ASX: MGG) or Vanguard MSCI Index International Shares ETF (ASX: VGS).

A way to get complete exposure to Asian shares is Vanguard FTSE Asia Ex Japan Shares Index ETF (ASX: VAE).

Vanguard is a world leader in offering low-cost exchange-traded funds (ETFs) to regular investors like you and I.

This Asian ETF is invested in over 1,200 Asian businesses across many countries including: China, South Korea, Taiwan, Hong Kong, India, Singapore, Thailand, Malaysia, Indonesia and Philippines.

There are few ETFs that offer exposure to over 1,000 businesses, so you’re getting good diversification with this ETF. Compared to the ASX, I think this ETF is well diversified with 29.5% allocated to financials, 22% to technology, 11.6% to consumer services, 10.1% to consumer goods and 9.3% to industrials. There’s a lot less allocated to resources.

What attracts me most to this ETF, apart from the general ‘Asian’ element, is the exposure to the big Asian businesses like Alibaba, Tencent and Ping An. These businesses are very large, growing at a fast rate, with strong economic moats and exciting futures. US tech companies have exciting futures too, but they have the valuations to match.

Foolish takeaway

The Vanguard Asia ETF had a price/earnings ratio of 13.6x at October 2019 with an earnings growth rate of around 12%. A PEG ratio of almost 1 in this economic environment is pretty attractive. A bonus is the dividend yield of 2.6%. This all looks attractive to me today. 

This ETF would work well in a growth-focused portfolio along with these top ASX growth shares.

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Motley Fool contributor Tristan Harrison owns shares of MAGLOBTRST UNITS and VANGUARD FTSE ASIA EX JAPAN SHARES INDEX ETF. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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