Emerging markets stocks and exchange traded funds are struggling again, but those ongoing struggles make it easier to identify areas of strength. One of this year’s strongest single-country emerging markets ETFs was one of the best performers when emerging markets were a leadership group several years ago: The iShares MSCI Thailand Capped ETF (NYSEArca: THD).
THD, the lone ETF dedicated to Thai stocks, is up nearly 3% this year. Investors have been departing previously favored emerging markets from South America to Asia with the latter being a significant cause for concern because international investors once viewed emerging Asia as a beacon of strength in the developing world.
However, THD is standing tall this year thanks in large part to Thailand’s steadying economy and barely noticeable unemployment rate.
“Thailand is the happiest place on earth — at least according to the Misery Index, which is calculated by adding together rates of unemployment and consumer-price inflation. The Southeast Asian nation of 69 million has long scored well on the scale of economic contentment, devised in the 1960s by American Arthur Okun, because its official jobless rate hasn’t been above 2 percent in almost seven years. This reflects a workforce where the biggest proportions are farmers or casual laborers, such as self-employed food vendors or motorcycle taxi drivers, many of whom aren’t counted in central bank figures,” reports Bloomberg.
Last year, the Thai parliament voted to impeach former Prime Minister Yingluck Shinawatra and moved forward with criminal charges against Shinawatra for her role in a rice price-fixing scandal.
Thailand’s economy and incomes have historically expanded faster and remained more stable under the three times the military led government, compared to the nine civilian ones. [Thailand Stocks, ETF Flourish Under Military Rule]
iShares MSCI Thailand Capped ETF
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.