Malaysia and Singapore have been working together to benefit their economies and, in turn, their exchange traded funds (ETFs).

Carl Delfeld for ETFfolio feels investors have finally begun to appreciate that Malaysia offers attributes that are similar to its neighbor to the south, Singapore.

Malaysia has a diversified economy: 43% of its gross domestic product (GDP) is in the service sector, while agriculture is 8%. One-third of its population is under the age of 15. Economic growth last year was 6%.

Malaysia's improvements have given the country power to improve its political and economic relationship with Singapore. In the past, the two countries have had a rocky relationship. By teaming up, though, it could be a win-win situation.

The iShares MSCI Malaysia (EWM) and the iShares MSCI Singapore (EWS) are two ways to get exposure to these countries. EWM is down 5.4% year-to-date, while EWS is up 0.3%.

Singapore's fund is most heavily allocated in the service sector, at 67.5%. Another 20.5% is in information. Malaysia's fund is split between the service (49.2%) and manufacturing (44%) sectors.

For full disclosure, some of Tom Lydon's clients own shares of EWS.