Once again, global exchange traded funds (ETFs) were the top performers for 2006.
Booming economic growth in China helped push the China ETFs to the number one and two spots for the year. iShares FTSE/Xinhua China 25 Index (FXI) and PowerShares Golden Dragon Halter USX China (PGJ) were up 81% and 51% respectively. Part of the growth in China is due to cargo – manufactured goods need to move throughout, in and out of the country; construction – infrastructure needs to be built; and consumers, also known as chuppies – consumption of high end goods is the current trend.
On the other side of the globe, Spain was one of the fastest growing economies in Europe, due to a wave of mergers and acquisitions, a surge in construction and a real estate boom. All factors helped boost iShares MSCI Spain (EWP) ending the year up 48%.
Back in Asia, doing business with your neighbor certainly can be a plus, as it was for Singapore. The country has the the world’s busiest port and enjoys a healthy economy. iShares MSCI Singapore (EWS) represents the region and was up 43% for the year.
Mexico made the top performing list last year and does so again in 2006. iShares MSCI Mexico (EWW) was up another 43% this year. Even with uncertain election results for part of the year, the Mexican economy boomed with abundant trade and infrastructure development.
Since China took up the top two spots we thought we would include number six, iShares MSCI Sweden (EWD), up 42%. Sweden’s economy was strong this year, even with an election this past fall. The ETF has a bit of exposure to financial service companies, which were key performers for the year.
For full disclosure, some of Tom Lydon’s clients own FXI, EWS and EWW.