Best of the Week
Most Popular
1. Ray Dalio: This Debt Cycle Will End Soon - John_Mauldin
2.Stock Market Dow Plunge Following Fake US - China Trade War Truce - Nadeem_Walayat
3.UK House Prices 2019 No Deal BrExit 30% Crash Warning! - Nadeem_Walayat
4.What the Oil Short-sellers and OPEC Don’t Know about Peak Shale - Andrew_Butter
5.Stock Market Crashed While the Yield Curve Inverted - Troy_Bombardia
6.More Late-cycle Signs for the Stock Market and What’s Next - Troy_Bombardia
7.US Economy Will Deteriorate Over Next Half Year. What this Means for Stocks - Troy_Bombardia
8.TICK TOCK, Counting Down to the Next Recession - James_Quinn
9.How Theresa May Put Britain on the Path Towards BrExit Civil War - Nadeem_Walayat
10.This Is the End of Trump’s Economic Sugar High - Patrick_Watson
Last 7 days
Gold Stocks Triple Breakout - 15th Dec 18
The stock market fails to rally each day. What’s next for stocks - 14th Dec 18
How Low Could the S&P 500 Go? - 14th Dec 18
An Industrial to Stock Trade: Is Boeing a BUY Here? - 14th Dec 18
Will the Arrest of Huawei Executive Derail Trade War Truce? - 14th Dec 18
Trump vs the Fed: Who Wins? - 13th Dec 18
Expect Gold & Silver to Pullback Before the Next Move Higher - 13th Dec 18
Dollar Index Trends, USDJPY Setting Up - 13th Dec 18
While The Stocks Bulls Fiddle With The 'Fundamentals,' Rome Burns - 13th Dec 18
The Historic Role of Silver - 13th Dec 18
Natural Gas Price Setup for a Big Move Lower - 13th Dec 18
How to Get 20% Off Morrisons Weekly Supermarket Shopping - 13th Dec 18
Gold Price Analysis: Closer To A Significant Monetary Event - 13th Dec 18
Where is the Stock Market Santa Claus Rally? - 12th Dec 18
Politics and Economics in Times of Crisis - 12th Dec 18
Owning Precious Metals in an IRA - 12th Dec 18
Ways to Improve the Value of Your Home - 12th Dec 18
Theresa May No Confidence Vote, Next Tory Leader Betting Market Analysis and Forecasts - 12th Dec 18
Gold & Global Financial Crisis Redux - 12th Dec 18
Wow Your Neighbours With the Best Christmas Projector Lights for Holidays 2018! - 12th Dec 18
Stock Market Topping Formation as Risks Rise Around the World - 11th Dec 18
The Amazing Story of Gold to Gold Stocks Ratios - 11th Dec 18
Stock Market Medium term Bullish, But Long Term Risk:Reward is Bearish - 11th Dec 18
Is a Deleveraging Event about to Unfold in the Stock Market? - 11th Dec 18
Making Money through Property Investment - 11th Dec 18
Brexit: What Will it Mean for Exchange Rates? - 11th Dec 18
United States Facing Climate Change Severe Water Stress - 10th Dec 18
Waiting for Gold Price to Erupt - 10th Dec 18
Stock Market Key Support Being Re-Tested - 10th Dec 18
May BrExit Deal Tory MP Votes Forecast, Betting Market Analysis - 10th Dec 18
Listen to What Gold is Telling You - 10th Dec 18
The Stock Market’s Long Term Outlook is Changing - 10th Dec 18
Palladium Shortages Expose Broken Futures Markets for Precious Metals - 9th Dec 18
Is an Inverted Yield Curve Bullish for Gold? - 9th Dec 18
Rising US Home Prices and Falling Sales - 8th Dec 18
Choosing Who the Autonomous Car Should Kill - 8th Dec 18
Stocks Selloff Boosting Gold - 8th Dec 18

Market Oracle FREE Newsletter

How You Could Make £2,850 Per Month

Profit from Booming Southeast Asian Economies with ETFs

Stock-Markets / Asian Economies Aug 12, 2010 - 07:33 AM GMT

By: Ron_Rowland

Stock-Markets

Best Financial Markets Analysis ArticleAs you know, I’m a fan of emerging markets and a big proponent of exchange trades funds (ETFs). They fit together almost perfectly.

Today I want to focus on one fast-growing region that is getting more and more attention as Western economies crumble: Southeast Asia. As you’ll see, ETFs give you some exciting new ways to get involved in this booming part of the world.


Southeast Asia Has Several Key Attractions for Investors

Huge Population

ETFs open the door to SE Asia.
ETFs open the door to SE Asia.

Add up all the countries that are south of China, east of India and north of Australia and the total population is around 600 million. That’s twice the size of the United States — without even counting China and India.

Abundant Natural Resources

Southeast Asia has been supplying natural resources to the rest of the world ever since Indian and Arab merchants pioneered the “Spice Trade” thousands of years ago. Now the region exports rice, rubber, crude oil, metals, textiles, and more. It’s no stretch to say that the industrialized world is built on materials from Southeast Asia.

Strategic Location

The nations of Southeast Asia straddle the critical shipping routes between China, Japan, India, Africa, the Middle East and Europe. Pirates have long sailed these waters because they know ships with valuable cargo have little choice but to pass through here.

SE Asia straddles key shipping routes.
SE Asia straddles key shipping routes.

Plus there is its proximity to China. Being on the doorstep of such a huge, dynamic economy while it catches up to the industrialized world is quite an advantage.

Playing SE Asia with ETFs

It used to be tough to invest in Southeast Asia. Even if you had the skill to pick individual stocks, you still had to open a brokerage account that could execute trades on third-world exchanges. This was too much trouble and risk for most people.

Now there is a better way: ETFs that give you quick, diversified exposure to the stock markets of key regional players like Indonesia … Thailand … Vietnam … and more!

With ETFs like the ones I name for you below, you can get a selection of fast-growing foreign companies with one simple trade on the U.S. markets.

Ready for the list? Here we go:

With a population of about 240 million, Indonesia is the largest country in the region by a wide margin. The local economy is growing at an astonishing pace. Huge crude oil reserves are a big help, but Indonesia is an economic powerhouse even without that sector.

You can pick from two different U.S.-based ETFs if you want to get a piece of Indonesia. Market Vectors Indonesia (IDX) is by far the largest and most popular. IDX jumped an amazing 64.1 percent in the year ending June 2010. iShares MSCI Indonesia (EIDO) is a newer alternative that also looks good.

Thailand is another important player. Despite a little recent instability, I think the long-term prospects for this market are amazing. Thailand is the “anchor economy” for neighboring countries Laos, Myanmar and Cambodia, making it the dominant force in its own mini-region.

The easiest way for an American to get involved with this growth is via iShares MSCI Thailand (THD). Volatile? You bet, but the kind of growth THD has seen since its low in late 2008 is hard to find in the Western world.

A third top selection is Malaysia, which is working hard to transition itself from an economy based on mining and agriculture to a modern industrial exporter. The glittering skyline of Kuala Lumpur is evidence that Malaysia is well on the road to success.

Kuala Lumpur is a modern city now.
Kuala Lumpur is a modern city now.

U.S. investors can buy into Malaysia with iShares MSCI Malaysia (EWM). For the five years ending June 2010, EWM had an average annual total return of 14.7 percent. The S&P 500 was actually down slightly in the same period!

Vietnam is back on the world’s radar screen in a big way. After being politically isolated for decades, the country joined the World Trade Organization in 2007 and is quickly becoming an economic force in the region. Vietnam’s young population and enterprising spirit provide good reasons to be optimistic about the future.

Market Vectors Vietnam (VNM) includes a variety of financial, energy, industrial and consumer stocks. Yes, it took a big tumble back in the spring, but I think VNM has impressive prospects in the long run.

Singapore is the only nation in the region with “developed market” status. This island city-state off the tip of Malaysia is actually more advanced than parts of the U.S. and Europe. Some people say Singapore actually has the best quality of life in all of Asia. It’s certainly thriving economically, with some of the highest per-capita GDP and foreign exchange reserves on the globe.

iShares MSCI Singapore (EWS) has a 12.5 percent five-year average annual return through the second quarter of this year. This easily beats just about every other developed market in the world. I think the outperformance will continue.

Some of the ETFs I’ve named today only came out in the last year or two, so their operating history is limited. They can also be illiquid and are subject to sharp moves (in both directions) when U.S. markets open for trading. So always use limit orders to help manage your risks.

Should you buy any of these ETFs today? The decision is yours, of course. I feel confident though that they will all deliver superior long-term results if bought selectively. Do a little research and I bet you’ll agree!

Best wishes,

Ron

P.S. I’ll be discussing the emerging markets and other important ETF trends in the second annual Weiss Global Forum on August 17. Join me along with Martin Weiss, Mike Larson, Tony Sagami, Claus Vogt, and Rudy Martin for this exciting interactive event. Click here for your free registration.

This investment news is brought to you by Uncommon Wisdom. Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. From time to time, the authors of Uncommon Wisdom also cover other topics they feel can contribute to making you healthy, wealthy and wise. To view archives or subscribe, visit http://www.uncommonwisdomdaily.com.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules