While some emerging markets have floundered so far in 2013, many in Southeast Asia have done quite well in the time frame. Products tracking countries like Thailand (THD) or Indonesia (IDX) have seen double digit gains so far in 2013, well in excess of peers in nations like Brazil or China which have actually seen losses in the time frame.
One country in the region has lagged so far in the year though, Malaysia. The country has faced a great deal of uncertainty thanks to an election which threatened to unseat the nation’s dominant party.
But with the election results favoring the incumbent, uncertainty surrounding the market has dissipated and the region appears to be well poised for solid growth going forward like its other Southeast Asian counterparts (Malaysia ETF Surges on Election Result).
After all, the economy is expected to post growth of 5% to 6% in 2013, suggesting a pretty solid year is ahead for the nation. This could be especially true if the global developed market economy continues to recover, and high levels of investment and domestic consumption remain the name of the game going forward.
So, investors seeking to ride on the solid fundamentals and growth prospects of the economy should look to invest in iShares MSCI Malaysia ETF (EWM). Currently, we have a Zacks ETF Rank of 1 or 'Strong Buy' on the fund, so we believe that the ETF will outperform its peers in the near term (see all the Top Ranked ETFs here).
About the Zacks ETF Rank
The Zacks ETF Rank provides a recommendation for ETFs in the context of our outlook for the underlying industry, sector, style box, or asset class. Our proprietary methodology also takes into account the risk preferences of investors. ETFs are ranked on a scale of 1 (Strong Buy) to 5 (Strong Sell) while they also receive one of three risk ratings, namely, Low, Medium, or High.
The aim of our models is to select the best ETFs within each risk category. We assign each ETF one of five ranks within each risk bucket. Thus, the Zacks ETF Rank reflects the expected return of an ETF relative to other products with a similar level of risk (see more in the Zacks ETF Rank Guide).
For investors seeking to apply this methodology to their portfolio in the emerging Southeast Asia market, we have taken a closer look at the top ranked EWM below:
iShares MSCI Malaysia ETF (EWM)
This fund seeks to match the price and yield of the MSCI Malaysia Index, before fees and expenses. EWM holds 43 stocks in its basket and is somewhat concentrated from both a sector and an individual security perspective.