While many investors have been preoccupied with the larger economies in Asia, Indonesia, along with the related exchange traded fund (ETF), have rebounded quite remarkably from its economic trough.
After Indonesia’s ETF, Market Vectors Indonesia ETF (IDX), gained more than 100% in three months, some still believe the ETF still has plenty of wiggle room, remarks Gary Gordon for ETF Expert. Indonesia is one of those lucky few countries that reported economic growth in the first quarter of 2009.
But be aware that there are some risks involved when investing in Indonesia’s ETF. The local currency can range from extreme fluctuations and there can be an enormous dependency on the Southeast Asian region. Currently, though, emerging market currencies are faring quite well against the dollar and China’s commodity spending spree.
Investors should also note that the volume of trading in IDX is around 30,000 shares or less a day. Its P/E ratio is around 12, or around the end of March levels. The largest sector in the ETF is in banking with around 33% of total holdings.