The Franklin FTSE Asia ex Japan ETF (FLAX) tracks and index of large- and mid-cap stocks in developed and emerging markets in Asia, excluding Japan. Many Asia-Pacific equity funds make a large allocation to Japan. While Japan is one of the world’s largest economies, it has also had extended periods of low growth rates and rising debt burdens. Some investors would rather avoid this potential drag on their portfolio. FLAX invests in China, South Korea, Hong Kong, India, Indonesia, Malaysia, Pakistan, the Philippines, Singapore, Taiwan, and Thailand. The inclusion of emerging and developed markets, plus a sizable allocation to mid cap stocks gives FLAX a deeper portfolio than some of its rivals.
FLAX is reasonably priced, and as of June 2020 is significantly cheaper than rival iShares MSCI Pacific ex-Japan ETF (EPP), though investors should always comparison shop since issuers regularly cut prices. Despite the lower management fee, FLAX has been slow to attract assets and liquidity.