Vanguard's head of investments for the Asia Pacific, Rodney Comegys, told SMSF Adviser the changes to the benchmark will offer SMSF investors two forms of diversification benefits, with the addition of small caps stocks and China A-shares.

“Historically foreign investment in mainland China has been limited and regulated, but the market has started to become more accessible,” said Mr Comegys.

Home country bias, Mr Comegys said, can be a source of risk in SMSF portfolios, and international diversification can help reduce that risk.

“For those who choose to include emerging markets in their portfolio, VGE now provides exposure with the simplicity of a single trade on the ASX,” he said.

Vanguard said the change was made possible by the China Securities and Regulatory Commission (CSRC) and State Administration of Foreign Exchange (SAFE).

In recent months, Vanguard said the CSRC has granted Vanguard, through Vanguard Investments Australia, a Renminbi Qualified Foreign Institutional Investor (RQFII) licence and SAFE approved a quota to invest.