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Malaysia's economy and the ETF that tracks it, iShares MSCI Malaysia (NYSEARCA:EWM), is enjoying a growth spurt and doesn't look to be topping out anytime before 2008. As Southeast Asia's third largest country, growth should accelerate 6% this year, the fastest pace in 3 years; and it is predicted to expand 6% in 2008, report Stephanie Phang and Angus Whitley of Bloomberg .

The economy has enough momentum to stave off interest rate cuts and the government has plans to spend around $58 billion on bridges, roads and other development projects. Next month, over a million civil servants will get their first pay raise in over 5 years. Its currency, the ringgit, has gained about 2.9% against the dollar this year.

EWM is already up 33% year-to-date. Top holdings include Bumiputra-Commerce HLDGS at 9.44%; Malayan Banking 8.29%; and IOI Corp. 6.69%. Financials lead the pack at 31.82%, followed by industrials with 18.17% and consumer discretionary at 13.77%.

EWM 1-yr chart:

Source: Malaysia ETF Enjoying A Vigorous Growth Spurt