Bangkok has become the world’s most popular destination for air travelers but investors are selling the iShares MSCI Thailand ETF (NYSEArca: THD) after a strong rally, pushing the fund below a key technical indicator.
The Thailand ETF has been under pressure the past two weeks after hitting multiyear highs earlier in May.
In particular, investors were looking for a bigger rate cut from the Bank of Thailand. [Thailand ETF Falls As Rate Cut Disappoints]
The emerging market ETF is cooling a bit after delivering huge performance in recent years. For example, THD sports a three-year annualized return of about 30%, compared with 5% for iShares MSCI Emerging Markets (NYSEArca: EEM), according to Morningstar.
THD has been helped by a rising Thai baht since the ETF does not hedge its foreign currency exposure. The strengthening currency, however, has weighed on the country’s exporters.
Still, Thailand’s booming economy has been one of the biggest success stories in emerging markets in recent years.
For example, Reuters reports that Bangkok has edged out London as the world’s most popular air travel destination, becoming the first Asian city to earn the distinction, according to a ranking by the MasterCard Index of Global Destination Cities.