Southeast Asia is situated east of the roughly 1 billion people in India, south of the approximately 1.3 billion people in China and north of commodity rich Australia. While China and India earn the majority of the news in that part of the world, there are several other countries located in the region with ETFs including Taiwan, Singapore, Malaysia and Thailand.
Investors curious to know if exploring beyond China into Southeast Asia results in more risk than reward should pay close attention to the performance of the ETFs below. (For more information about investing overseas, read Investing Beyond Your Borders.)
Taiwan's Lingering Complications
Tensions that exist between Mainland China and Taiwan remain unsolved. China is keen on a complete reunification of the two countries. Meanwhile, Taiwan's Democratic Progressive Party approved a resolution declaring its separate identity from China in 2007. The iShares MSCI Taiwan Index ETF (AMEX:EWT) is down about 32.27% since the beginning of year.
Top holdings include Taiwan Semiconductor Manufacturing (NYSE:TSM), Hon Hai Precision Industry (OTC:HNHPF) and Taiwan based wireless phone producer HTC. In comparison the iShares MSCI EAFE Index (AMEX:EFA) has fallen roughly 25.07% while the iShares FTSE/Xinhua China 25 Index ETF (AMEX FXI) has fallen about 44.95%.
Singapore's Active Port
Singapore has one of the busiest shipping ports in the world due to the country's heavy emphasis on exports of its manufactured goods. A sample of manufactured goods coming out of Singapore includes electronics and biomedical sciences equipment. The iShares MSCI Singapore Index ETF (AMEX:EWS) has declined about 25.90% since the beginning of the year. Top holdings include Singapore Telecom (OTC:SNGNF), United Overseas Bank and DBS Group Holdings (OTC:DBSDY).
Malaysia Trying to Kick the Export Addiction
Malaysia is one of the world's top exporters of electronics, natural rubber, palm oil, cocoa, pepper and tobacco. The Malaysian government is focused on efforts to wean itself off of the exports it relies on to drive its economy. The iShares MSCI Malaysia Index ETF (AMEX:EWM) is down about 32.57% since the beginning of the year. EWM's top holdings include Bumiputra-Commerce Holdings, Malayan Banking (OTC:MLYBY) and IOI.
Thailand Post Tsunami
Thailand has been able to recover from the devastating tsunami in 2004 on the strength of exports, automobile production and farm output. Top holdings in the iShares MSCI Thailand ETF (AMEX:THD) include PTT Public, Bangkok Bank and PTT Exploration and Production (PEXNY). The fund was just launched this past March.
Singapore shares the distinction of being one of the Four Asian Tigers along with Hong Kong, South Korea and Taiwan. It is home to many international companies and has been ranked by the World Bank as one of the best places in the world to do business. If I had to choose one out of Southeast Asia the Singapore ETF would easily win my vote.
For more on ETF investing, read Pump Up Your Portfolio With ETFs.