Investing in emerging markets offers plenty of rewards to patient investors who can stomach volatility. However, most portfolios these days hold too little or focus on a few key nations, such as those in the BRIC. People think "South America" and they go to Brazil (NYSE:EWZ); for Asian investments it's China (NYSE:FXI). Although BRIC contains over 40% of the world's population, there are plenty of other emerging economies that offer great investment opportunities. Investors maybe selling themselves short by creating such a narrow focus.

IN PICTURES: Top 10 Forex Trading Rules

Asia has Opportunities

The growth story in China is well documented. Its impressive GDP growth, healthy balance sheet and growing consumer middle class helps make China a developing force far ahead into the future. All of that growth has some beneficial side effects. Specifically, the spill over into Asia's other nations. These "Asian Tigers," such as Singapore (NYSE:EWS), are characterized by fast-moving manufacturing economies filled with young populations. Improved living standards and rising disposable incomes have created demand for consumer goods. This spending spurred on economic development, urbanization and industrialization. Add this to the progressive monetary policies enacted by their governments during the recent crisis, and you have recipe for success.

Taming the Tigers
Adding the members of the Asian Tigers to a portfolio used to be a complicated endeavor, only available to the most sophisticated intuitional investors. Nevertheless, the exchange traded fund (ETF) boom has made these nations available to retail investors wanting to cash in on the growth on that continent. Aside from the more traditional Asian emerging markets, there are a host of new ETFs that dive into some of the faster growing economies in the region. (For more, see Going International)

As the fourth most populated nation in the world - 243 million residents in all - Indonesia can be thought of as a similar play on the growth of the international consumer. Indonesia also has a stable democracy and capitalistic based economy, which it uses to its advantage. The nation also benefits from being a net exporter of several key natural resources. Indonesia is the largest exporter of thermal-coal, to which China is the world's largest importer of this type of coal. The country is also an exporter of palm oil. This commodity is seeing increased growth as both a cooking medium as well as an alternative fuel source. Indonesia will profit greatly if, as expected, the demand for palm oil in China and India increases rapidly by 2014. Rice, rubber and coffee also are produced in the nation. The easiest way to add Indonesia to a portfolio is through the Market Vectors Indonesia ETF (NYSE:IDX). The fund is up 28.5% over the past twelve months.

Of Vietnam's 87 million citizens, half are younger than 30. This incredibly young population has had dramatic effects, both politically and economically for the nation. The country's accession to the World Trade Organization in 2007 has improved Vietnam's stance in the global arena. Following protocols created by the World Bank, Vietnam has achieved some major milestones, including a 94% rate of total households with electricity and increased education reforms. Almost all children now attend primary schools and participate in literacy programs. Vietnam also benefits from lower labor costs than China, a growing middle class and has been the target of large-scale foreign direct investment. Intel Corporation (Nasdaq: INTC) recently opened its new $1 billion dollar facility in Ho Chi Minh City. The Market Vectors Vietnam ETF (NYSE:VNM) gives exposure to the largest Vietnam based companies. The ETF is down slightly over the past twelve months.

The Bottom Line
China is often the go to emerging market play for Asia, however the continent offers many other exciting opportunities that would be wise to include in a portfolio. Both Vietnam and Indonesia with their corresponding ETFs offer diversified growth within the region. Like China in previous decades, these markets may offer untapped return potential. (For more information in international investing, refer to Does International Investing Really Offer Diversification? and Why Invest In International Equity Mutual Funds.) Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  2. Investing Basics

    Building My Portfolio with BlackRock ETFs and Mutual Funds (ITOT, IXUS)

    Find out how to construct the ideal investment portfolio utilizing BlackRock's tools, resources and its popular low-cost exchange-traded funds (ETFs).
  3. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  4. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
  5. Investing News

    Is Buffett's Bet on Oil Right for You? (XOM, PSX)

    Oil stocks are getting trounced, but Warren Buffett still likes one of them. Should you follow the leader?
  6. Investing

    3 Things About International Investing and Currency

    As world monetary policy continues to diverge rocking bottom on interest rates while the Fed raises them, expect currencies to continue their bumpy ride.
  7. Investing News

    Chipotle Served with Criminal Probe

    Chipotle's beat muted expectations and got a clear bill from the CDC, but it now appears that an investigation into its E.coli breakout has expanded.
  8. Stock Analysis

    Analyzing Sprint Corp's Return on Equity (ROE) (S)

    Learn about Sprint's return on equity. Find out why its ROE is negative and how asset turnover and financial leverage impact ROE relative to Sprint's peers.
  9. Stock Analysis

    Why Alphabet is the Best of the 'FANGs' for 2016

    Alphabet just impressed the street, but is it the best FANG stock?
  10. Investing News

    A 2016 Outlook: What January 2009 Can Teach Us

    January 2009 and January 2016 were similar from an investment standpoint, but from a forward-looking perspective, they were very different.
RELATED FAQS
  1. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  2. Do ETFs pay capital gains?

    Exchange-traded funds (ETFs) can generate capital gains that are transferred to shareholders, typically once a year, triggering ... Read Full Answer >>
  3. How do real estate hedge funds work?

    A hedge fund is a type of investment vehicle and business structure that aggregates capital from multiple investors and invests ... Read Full Answer >>
  4. Are Vanguard ETFs commission-free?

    While some Vanguard exchange-traded funds (ETFs) are available commission-free from third-party brokers, a large portion ... Read Full Answer >>
  5. Do Vanguard ETFs require a minimum investment?

    Vanguard completely waives any U.S. dollar minimum amounts to buy its exchange-traded funds (ETFs), and the minimum ETF investment ... Read Full Answer >>
  6. Can mutual fund expense ratios be negative?

    Mutual fund expense ratios cannot be negative. An expense ratio is the sum total of all fees charged by an asset management ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center