Asian markets and exchange traded funds (ETFs) are on the rise. Let’s take a closer look to see why they are blossoming.
After being crippled in a stagnating global economy, emerging market countries in Asia are showing signs of rejuvenation, remarks Gary Gordon for ETF Expert.
Korea’s ETF iShares MSCI South Korea Index (EWY), which is up 24.2% year-to-date, is above its 200-day long-term moving average. Investors are favoring the growth potential of Korean tech companies like Samsung and LG, along with Hyundai.
Malaysia’s country ETF iShares MSCI Malaysia Index (EWM) is up 18.2% year-to-date, and it previously had a 30% off its high, or the lowest “percentage-off-its-high” of any nation. Malaysia exports petroleum, liquefied natural gas, wood and rubber. Its ETF is also weighted at 30% in financials. The only concern whether Malaysia is able to compete against other cheap manufacturers in the regions.
Taiwan’s iShares MSCI Taiwan Index (EWT), which is up 42.5% year-to-date, is being boosted by its technology sector, and information tech makes up around 60% of the ETF. Semiconductors are making a come back and EWT is seeing the benefits.
Many Asian countries now realize that they need to boost domestic consumption or risk being fettered to the economic health of Western countries, according to the Canadian Press.
Japan has started to focus away from exports to domestic sectors including green technologies, medical services and pop culture. Prime Minister Taro Aso announced plans to increase domestic demand by $400 billion in three years and add up two million in new jobs.
- iShares MSCI Japan Index (EWJ): down 5.5% year-to-date
China’s $586 billion stimulus package is likely to boost consumer spending and increase jobs in infrastructure and public works.
- iShares FTSE/Xinhua China 25 Index (FXI): up 17.9% year-to-date
Max Chen contributed to this article.