Home page Company name and slogan

 
Custom Search
Investment Newsletters Best Fidelity Funds Best ETFs Get Free Reports 10-Year Journey Blog
MoneyMatters Logo
 

AlphaProfit MoneyMatters Investing Blog RSS Feed

Sam Subramanian

Global X ASEAN ETF Review

Sam Subramanian PhD, MBA

Investors seeking exposure to emerging markets generally consider broadly diversified exchange-traded funds like Vanguard MSCI Emerging Markets ETF (VWO) or iShares MSCI Emerging Markets ETF (EEM).

A few regional ETFs are available offering exposure to emerging markets in different geographic regions. They include iShares MSCI Emerging Markets Eastern Europe ETF (ESR) and iShares S&P Latin America 40 ETF (ILF).

The rapid economic growth of Brazil, Russia, India, and China has made investing in the BRIC theme highly popular. iShares MSCI BRIC ETF (BKF) is an example of this thematic ETF. Another thematic ETF is iShares S&P Emerging Markets Infrastructure ETF (EMIF) to profit from infrastructure build-out programs in emerging markets.

Now a new option has become available for investment specifically in ASEAN countries ... the Global X ASEAN ETF (ASEA). This ETF seeks to match the performance of stocks included in the FTSE ASEAN 40 Index.

What is ASEAN

ASEAN, an acronym for Association of Southeast Asian Nations, is a group of countries seeking to accelerate economic growth through mutual free trade. The association includes Indonesia, Malaysia, the Philippines, Singapore, and Thailand as the founding members along with Brunei, Cambodia, Laos, Myanmar and Vietnam.

Global X ASEAN ETF ASEA Review

Global X ASEAN ETF (ASEA) invests in Indonesia, Malaysia, the Philippines, Singapore, and Thailand, the founding members of the Association of Southeast Asian Nations.

Investments in the Global X ASEAN ETF

The Global X ASEAN ETF invests in the 40 largest companies in the founding members of ASEAN. The current weightings for these countries are as follows: Singapore 41.2%, Malaysia 32.8%, Indonesia 14.8%, Thailand 10.6%, and the Philippines 0.6%.

Why invest in Global X ASEAN ETF

Singapore features in the MSCI Developed Markets Index. The other four founding members of ASEAN are among the fastest growing emerging nations, benefiting from foreign direct investments, low labor costs, and strengthening relationship with China. A rapidly expanding affluent middle class, that is estimated to touch 300 million by 2015, is driving demand for a variety of consumer goods and services.

How to invest in Global X ASEAN ETF

The Vanguard MSCI Emerging Markets ETF and the iShares MSCI Emerging Markets ETF invest in a broad range of emerging market countries from Brazil to Turkey. As such, only 6% to 7% of assets are invested in Indonesia, Malaysia, Thailand, and the Philippines, the emerging economies of ASEAN.

To increase exposure to the ASEAN block, investors can take a core and satellite approach with Vanguard MSCI Emerging Markets ETF or the iShares MSCI Emerging Markets ETF as the core and Global X ASEAN ETF as the satellite part of their emerging market ETF portfolio. For more on ETF portfolio construction, see: Best ETFs to Build Your ETF Portfolio

Alternative to Global X ASEAN ETF

In lieu of investing in Global X ASEAN ETF, investors can also invest in ETFs specific to individual countries in the FTSE ASEAN 40 Index. They are iShares MSCI Indonesia ETF (EIDO), iShares MSCI Malaysia ETF (EWM), iShares MSCI Philippines ETF (EPHE), iShares MSCI Singapore ETF (EWS), and iShares MSCI Thailand ETF (THD).

Risk of Investing in Global X ASEAN ETF

Over 40% of Global X ASEAN ETF's assets are invested in Singapore and nearly 75% of the ETF's assets are invested in Malaysia and Singapore, posing country concentration risk. Another risk is the dependence of ASEAN countries on China. Like other emerging markets ETFs, Global X ASEAN ETF carries foreign currency, inflation, and political risks.

AlphaProfit ETF Model Portfolios and ETF Investment Newsletter

AlphaProfit's proven ETF selection process enables thousands of investors to thrive in turbulent markets.

ETF Model Portfolio Investment Process Selection - User Quotes

A dollar invested in the AlphaProfit's Aggressive Growth (ETF-Focus) and Capital Appreciation (ETF-Core) model portfolios is worth $46.14 and $22.73, respectively. This implies annualized returns of 20.8% and 16.7%, respectively.

Performance of ETF model portfolio driven by disciplined investment process
Performance of ETF model portfolio driven by disciplined investment process

Performance of ETF model portfolios as of March 31, 2014.

Sign up for ETF Newsletter

Comparable investments in the Dow Jones Wilshire 5000 and S&P 500 benchmarks are worth $6.12 and $5.94, respectively implying annualized returns of 9.4% and 9.2%, respectively.

The ETF model portfolios use AlphaProfit's proven ValuM investment process for selecting investments. This process has enabled AlphaProfit model portfolios to bag Hulbert Financial's #1 rank numerous times.

ETF Newsletter:
Sign up for the ETF Newsletter and receive AlphaProfit's Current Market Outlook and Special Report on 'Five Smart Ways of Using Sector ETFs'.

The chart above shows the actual performance of the ETF model portfolios since their launch in 2007. The performance shown before 2007 is the performance of AlphaProfit's ValuM investment process selections.

Related Links:
ETF Newsletter

FREE SIGN UP!

Protect & grow your wealth with
investment recommendations from free e-letter
AlphaProfit MoneyMatters

By Hulbert #1 rank winner Dr. Sam Subramanian

'Incisive Insights, Impressive Results'   - Jim Woodruff

First Name:


Email Address:


We respect your privacy. We will not spam or sell your information to others, period.

Popular How-To Guides

Custom Search

Recent MoneyMatters Articles

More from Investing Blog Sign Up for Free e-letter


About AlphaProfit MoneyMatters and AlphaProfit
AlphaProfit MoneyMatters is a free e-letter distributed to registered users of AlphaProfit's website. The e-letter analyzes the economy, markets, and sectors and provides money-making insights on stocks, exchange-traded funds, and mutual funds. AlphaProfit MoneyMatters is edited by Dr. Sam Subramanian acclaimed for his financial acumen and analytical skills.

AlphaProfit Investments, LLC is an independent investment research firm based in Sugar Land, TX. AlphaProfit publishes the AlphaProfit Sector Investor's Newsletter, edited by Dr. Sam Subramanian. Leveraging sector funds, the Newsletter provides high-performance model portfolios with Fidelity funds and exchange-traded funds. It also includes actionable stock recommendations. This newsletter features among MarketWatch's top 10 investment newsletters and has won the coveted #1 rank from Hulbert Financial several times.


Copyright Policy and Fair Use Guide
You are welcome to quote a short excerpt of the article not exceeding 100 words with attribution in the form of a hyperlink to the article's full URL or http://www.alphaprofit.com. If you wish to republish the article in full on your website, blog, or other media, you must obtain permission.

AlphaProfit MoneyMatters™ is for information purposes only. Nothing herein should be construed as an offer to buy or sell securities or to give individual advice on investing. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind. AlphaProfit Investments, LLC is not responsible for any errors or omissions. AlphaProfit Investments, LLC neither is associated with nor receives any compensation from any of the investment companies, brokers or entities connected with the securities mentioned herein. Please review our Terms and Conditions of Use and Subscriber Agreement which is available on our website at www.alphaprofit.com; they govern your relationship with AlphaProfit Investments, LLC, including, but not by way of limitation, use of the AlphaProfit MoneyMatters.



This page is best viewed in 1024 by 768 pixels screen resolution or higher.
Copyright © 2011 AlphaProfit Investments, LLC. All rights reserved.