U.S. Markets close in 49 mins

10 Country ETFs to Play Asian Markets

Will Ashworth

The U.S. Dollar Index hit a two-year high in early September as global growth continued to slow. The latest disruption to Saudi Arabia’s oil production as a result of drone attacks is expected to cause a possible oil price shock.

If this happens, the U.S. dollar could be the big winner making U.S. stocks even more expensive and Asian markets more attractive.

“Asian equities and Asian bonds look very attractive. That’s one of the key reasons why we are overweight Asian equities. Valuations are so low trading at a price-to-book that’s about half the U.S.,” stated Eastspring Investments Asian equity portfolio specialist Ken Wong recently. “While you look at overall earnings growth, it’s fairly solid for 2020 in Asia, while expectations are fairly low.” 

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Eastspring, which manages $216 billion in assets, has an on-the-ground presence in 11 Asian markets. 

For those of you that want to gain a little exposure to some of these markets might consider these 10 country ETFs.  


China: SPDR S&P China ETF (GXC)

Source: Shutterstock

The SPDR S&P China ETF (NYSEARCA:GXC) tracks the performance of the S&P China BMI Index, a group of companies based in China that are publicly traded and available to foreign investors. 

GXC currently has 382 holdings, about 56% of the holdings in the index, whose weighted average market cap is $146.4 billion, making it very much a large-cap ETF. If you like a little income with your capital appreciation, GXC has a 12-month dividend yield of 2.08%. 

Its top 10 holdings account for 47% of the fund’s $1.2 billion in assets with Tencent Holdings (OTCMKTS:TCEHY) and Alibaba (NYSE:BABA) the two top holdings at 13.5% and 13.1% respectively. 

The biggest downside of GXC is that two stocks account for more than a quarter of the ETF’s weighting leaving tiny slivers for the remaining 380 stocks. If you don’t believe in Alibaba and Tencent, you probably don’t want to own it. 

The ETF charges a reasonable 0.59% management expense ratio.


China/India: First Trust Chindia ETF (FNI)

Source: Shutterstock

The First Trust Chindia ETF (NYSEARCA:FNI) tracks the performance of the ISE Chindia Index, a group of companies that are either based in China or India and whose ADRs trade on a U.S. securities exchange.  

FNI currently has 50 holdings, the same amount as the index, with 25 stocks from each country. The median market cap is $9.3 billion, the largest market cap is $455.7 billion, and the smallest is $166.0 million, making it very much an all-cap ETF. 

If you like a little income with your capital appreciation, FNI won’t do the trick. It has a 12-month dividend yield of just 0.67%. 

Its top 10 holdings account for 60% of the fund’s $96.7 million in assets with Alibaba, the top holding, at 8.0%.

With just 25 stocks from both China and India, the individual weighting of each stock is much more balanced despite the fact the 40 remaining stocks account for 40% of the portfolio. 

The ETF charges a reasonable 0.59% management expense ratio.


India: Franklin FTSE India ETF (FUN)

Source: Shutterstock

The Franklin FTSE India ETF (NYSEARCA:FUN) tracks the performance of the FTSE India Capped Index , a group of large- and mid-cap companies in India. 

FUN currently has 150 holdings with a weighted average market cap of $35.9 billion and a 12-month trailing P/E ratio of 19.5. FUN has a 12-month dividend yield of just 1.47%, which is decent, if not spectacular.  

Its top 10 holdings account for 48% of the fund’s $14.7 million in assets with Reliance Industries, the top holding at 10.5%.

In terms of sector representation, the top three are financial services, technology, and energy, at 23.3%, 18.3%, and 14.4%, respectively. 

The best part about FUN? It charges a very reasonable 0.19% management expense ratio.


Indonesia: VanEck Vectors Indonesia Index ETF (IDX)

emerging markets

Source: Studio Incendo via Flickr (Modified)

The VanEck Vectors Indonesia Index ETF (NYSEARCA:IDX) tracks the performance of the MVIS Indonesia Index, a group of companies that generate at least 50% of their revenues in Indonesia. The country has the largest economy in Southeast Asia with over 40% of the population under the age of 25.  

IDX currently has 44 holdings with a weighted average market cap of $16.6 billion and a 12-month trailing P/E ratio of 15.6. FUN has a 12-month dividend yield of 2.12%, which is quite healthy. 

Its top 10 holdings account for 55% of the fund’s $40.9 million in assets with PT Bank Central Asia (OTCMKTS:PBCRF), the top holding at 8.3%.

In terms of sector representation, the top three are financial services, basic materials, and consumer defensive, at 29.8%, 17.6%, and 16.4%, respectively. 

As for fees, it charges a reasonable 0.57% management expense ratio. 


Japan” WisdomTree Japan Hedged Equity Fund (DXJ)

Source: Shutterstock

The WisdomTree Japan Hedged Equity Fund (NYSEARCA:DXJ) tracks the performance of the WisdomTree Japan Hedged Equity Index, a group of dividend-paying companies that trade on the Tokyo Stock Exchange and derive less than 80% of their revenue from Japan. 

By providing a hedged ETF, WisdomTree is protecting investors against fluctuations in the Japanese Yen against the U.S. Dollar. As for why it screens out companies with more than 80% of its revenue derived from Japan, it does so to ensure the selected constituents are more global in nature.

DXJ currently has 470 holdings with an average market cap of $16.8 billion, almost five billion more than the category average. Except for a 16.0% mid-cap weighting, all of the ETF’s holdings are large-cap Japanese stocks. DXJ has a 12-month dividend yield of 1.84%, which is decent, if not spectacular. 

Its top 10 holdings account for just 29% of the fund’s $2.6 billion in assets with Toyota (NYSE:TM) its largest holding with a weighting of 5.3%. 

In terms of sector representation, the top three are consumer cyclical, industrials, and technology, at 22.8%, 21.70%, and 14.0%, respectively. 

As for fees, when you consider it’s one of the most popular international ETFs listed in the U.S., its 0.48% management expense ratio is quite reasonable.  


Malaysia: iShares MSCI Malaysia ETF (EWM)

Source: Shutterstock

The iShares MSCI Malaysia ETF (NYSEARCA:EWM) tracks the performance of the MSCI Malaysia Index, a group of large- and mid-cap stocks trading on the Kuala Lumpur Stock Exchange. A significant portion of the stocks held are financial services companies. 

EWM currently has 44 holdings with an average market cap of $8.5 billion, less than one-third the category average. Mid-cap stocks account for almost 12% of the portfolio with large caps accounting for the rest. EWM has a 12-month dividend yield of 3.66%, which is excellent. 

Its top 10 holdings account for just 53% of the fund’s $404.4 million in assets with Public Bank Bhd its largest holding with a weighting of 13.4%. 

In terms of sector representation, the top three are financial services, consumer defensive, and utilities at 33.3%, 13.9%, and 11.9%, respectively. 

As for fees, it has a very reasonable management expense ratio of 0.48%.  


Singapore: iShares Singapore (EWS)

Source: Wikipedia

The iShares MSCI Sinapore ETF (NYSEARCA:EWS) tracks the performance of the MSCI Singapore 25/50 Index, a group of large- and mid-cap stocks trading on the Singapore market. The index caps the maximum weight a single stock may have at 25%. 

Further, all stocks with a weighting of 5% or more, on a combined basis cannot exceed 50% of the portfolio, which means if there are 11 stocks with a weighting of 5% or more, they’re capped at 5%. 

EWS currently has 25 holdings with an average market cap of $14.8 billion, about half the category average. Mid-cap stocks account for slightly more than 8% of the portfolio with large caps accounting for the rest. EWS has a 12-month dividend yield of 3.92%, which is excellent. 

Its top 10 holdings account for just 71% of the fund’s $522.4 million in assets with DBS Group Holdings (OTCMKTS:DBSDY) its largest holding with a weighting of 17.9%. 

In terms of sector representation, the top three are financial services, industrials, and real estate at 48.9%, 17.6%, and 15.4%, respectively. 

As for fees, it has a very reasonable management expense ratio of 0.47%. 


South Korea:  iShares MSCI South Korea ETF (EWY)

Source: Shutterstock

The iShares MSCI South Korea ETF (NYSEARCA:EWY) tracks the performance of the MSCI South Korea 25/50 Index, a group of large- and mid-cap stocks trading on the Stock Market division of the Korea Exchange. The index caps its holdings in identical fashion to the MSCI Singapore 25/50 Index.

EWY currently has 113 holdings with an average market cap of $18.4 billion, less than the category average of $26.5 billion. Mid-cap stocks account for slightly more than 16% of the portfolio with large caps accounting for the rest. EWY has a 12-month dividend yield of 1.48%, which is about average. 

Its top 10 holdings account for just 48% of the fund’s $4.1 billion in assets with Samsung Electronics (OTCMKTS:SSNLF) its largest holding and a whopping 22.8% weighting. 

In terms of sector representation, the top three are technology, financial services, and consumer services at 42.3%, 13.2%, and 11.8%, respectively. 

As for fees, it has a reasonable management expense ratio of 0.59%. 


Taiwan: Franklin (FLTW)

Source: Shutterstock

The Franklin FTSE Taiwan ETF (NYSEARCA:FLTW) tracks the performance of the FTSE Taiwan Capped Index, a group of large- and mid-cap Taiwanese stocks, capped in a similar fashion to iShares’ EWS and EWY. 

FLTW currently has 91 holdings with an average market cap of $18.0 billion, about 37% as large as the category average of $49.0 billion. Mid-cap stocks account for 9% of the portfolio with large caps accounting for the rest. FLTW has a 12-month dividend yield of 1.01%, which is lower than average. 

Its top 10 holdings account for just 48% of the fund’s $15.6 million in assets with Taiwan Semiconductor (NYSE:TSM) its largest holding at a weighting of 21.7%. 

In terms of sector representation, the top three are technology, financial services, and basic materials at 50.1%, 21.6%, and 11.6%, respectively. 

As for fees, it has a very reasonable management expense ratio of 0.19%. 


Broad Market Asia: Global X FTSE Southeast Asia ETF (ASEA)

Source: Shutterstock

The Global X FTSE Southeast Asia ETF (NYSEARCA:ASEA) tracks the performance of the FTSE/ASEAN 40 Index, 40 of the largest and most liquid companies in Singapore, Malaysia, Indonesia, Thailand, and the Philippines. To be eligible for the index, it must belong to the FTSE All-World Country Index for these five countries.

ASEA has 41 holdings with an average market cap of $24.9 billion, about 80% as large as the category average of $31.0 billion. As far as I know, it holds no mid-cap stocks. ASEA has a 12-month dividend yield of 4.7%, which is excellent.

Its top 10 holdings account for just 52% of the fund’s $23.7 million in assets with DBS Group Holdings its largest holding at a weighting of 8.3%. 

In terms of sector representation, the top three are financial services, communication services and consumer defensive at 49.2%, 12.3%, and 7.9%, respectively. 

As for fees, it’s relatively expensive at 0.65%. 

At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.

The post 10 Country ETFs to Play Asian Markets appeared first on InvestorPlace.