As mentioned, it is this Hong Kong index that is home to many of the China-focused investments made by Asia ex Japan funds. But it is far from the only option. Some Chinese shares, such as web portal Alibaba, are accessed via their listings in the US.
Other major companies in the region are listed in Taiwan.
It is not just about Chinese firms, however. South Korea accounts for 13 per cent of the benchmark, with Samsung alone representing around 3.5 per cent of the index.
Tech leading the way
One other thing that tends to unite these shares is a focus on technology.
Tencent, the largest stock in the index and now the fifth-largest company in the world by market value, runs hugely popular Chinese instant messaging and video-streaming services, among other strings to its bow. Active managers focusing on Asia-Pacific are typically overweight the company.
As a sector, tech now accounts for a quarter of the typical Asia-Pacific ex Japan equity benchmark. Beijing may have been priming the pumps, but the rapid growth of this kind of company has played a big part in boosting returns, too.
As long as this continues, this part of the Chinese market is likely to perform as well as the similarly tech-heavy US equity benchmarks.
Further evidence that these funds are not too far removed from more mainstream prospects can be found by looking at the top 10 holdings of FTSE 100-listed investment trust Scottish Mortgage. Tencent, Alibaba, and Chinese search engine Baidu account for almost 20 per cent of the portfolio.
There are more conventional businesses within the Asia-Pacific indices. Australia makes up 18 per cent of the typical index, and the top end of the country’s equity market is now dominated by banks rather than resources companies. India, meanwhile, accounts for just 9 per cent but has long been a favourite hunting ground for active managers.
The Indian equity market has shrugged off domestic economic issues such as demonetisation (the withdrawal of larger bank notes from circulation) to post a 74 per cent gain in sterling terms over the past half decade.
Table 1 shows the best performers in the region for the five years to 30 June this year.
Many of the better funds are indeed overweight technology, not least the investment trust that tops the pile.
Baillie Gifford Pacific Horizon holds around half its portfolio in such sectors, and has returned £2,355 on £1,000 over the past five years. That puts it narrowly ahead of an open-ended fund, the Hermes Asia ex Japan portfolio run by Jonathan Pines, which has delivered £2,351 over this period.
Discrete returns show the Hermes fund has been less volatile than Pacific Horizon, avoiding the latter’s negative return in 2015-16. On the other hand, it has a shorter track record, having only launched in 2012, and is currently closed to new investors.
Questions appear on the last page of this article.