Institutional investors are throwing money back into emerging Asia. The average retail investor can also pick and choose their Asia market exposure through country-specific exchange traded funds.
After a two month sell-off, foreign institutional investors funneled $5.3 billion back into emerging Asia equities, reports Shuli Ren for Barron’s.
According to HSBC, Chinese equities attracted the lion’s share of the new inflows, followed by India.
Investors interested in the Chinese markets can select from a range of ETF options. For instance, the iShares China Large-Cap ETF (NYSEArca: FXI) is the largest China country-specific ETF and includes a hefty 45.7% position in the financial sector while the SPDR S&P China ETF (NYSEArca: GXC) takes a lighter position on Chinese financials at 29.1%. Additionally, the Deutsche X-trackers Harvest CSI 300 China A-Shares Fund (NYSEArca: ASHR) was the first U.S.-listed ETF to offer physical exposure to A-shares stocks. [A Bumpy Ride for A-Shares ETFs]
The PowerShares India Portfolio (NYSEArca: PIN) and iShares MSCI India ET (NYSEArca: INDA) provide diversified exposure to Indian equities. [ETFs to Play the Largest Wealth Fund’s India Bet]
Alternatively, investors can target the two large Asian economies through the First Trust ISE Chindia Index Fund (NYSEArca: FNI), which includes both Chinese and Indian stocks.
Additionally, institutional funds continue to overweight Thailand and the Philippines. Retail investors can also gain exposure to the Thai equities market through the iShares MSCI Thailand Capped ETF (NYSEArca: THD) and the Philippine market through iShares MSCI Philippines ETF (NYSEArca: EPHE).
However, institutions remain underweight Taiwan, Korea, Malaysia and Hong Kong. Emerging market ETF investors should be aware that their broad fund positions may include heavier positions in these countries. For instance, the iShares MSCI Emerging Markets ETF (NYSEArca: EEM) includes South Korea 14.1% and Taiwan 12.1%. So, investors with more assets in their portfolios can pick and choose their emerging market exposure with country-specific ETFs.
For more information on developing economies, visit our emerging markets category.
Max Chen contributed to this article.