That view does not take into consideration other important investment factors; however, from return history, and a valuation and yield perspective, they seem strongest among EM countries.
The rolling period yields have been solid for local stock markets in Thailand, Indonesia and Peru - particularly so in Thailand. When it comes to the proxy ETFs, Thailand is the higher yielding of the three.
Figure 1 presents the annualized total returns, price returns and dividend returns for 1, 3, 5 and 10 years for the local country markets expressed in U.S. dollars, as measured by MSCI.
Figure 2 presents the data available at Morningstar for trailing yield, forward yield, forward P/E ratio and five-year forward and historical earnings growth for proxy ETFs (and also forward and historical PEG ratios derived by dividing the forward P/E by the forward or historical earnings growth rate).
Country Export/Import Profiles:
According to the CIA, Thailand, Indonesia and Peru export and import these commodities, from and to these countries:
- Textiles and footwear, fishery products, rice, rubber, jewelry, automobiles, computers and electrical appliances
- China 12%, Japan 10.5%, U.S. 9.6%, Hong Kong 7.2%, Malaysia 5.4%, Singapore 5%, Indonesia 4.4% (2011 est.)
- Capital goods, intermediate goods and raw materials, consumer goods, fuels
- Japan 18.5%, China 13.4%, UAE 6.3%, US 5.9%, Malaysia 5.4%, South Korea 4% (2011 est.)
- Oil and gas, electrical appliances, plywood, textiles, rubber
- Japan 16.3%, China 10%, U.S. 9.1%, Singapore 8.7%, South Korea 8%, India 6.3%, Malaysia 5.9% (2010)
- Machinery and equipment, chemicals, fuels, foodstuffs
- China 15.1%, Singapore 14.9%, Japan 12.5%, U.S. 6.9%, Malaysia 6.4%, South Korea 5.7%, Thailand 5.5% (2010)
- Copper, gold, zinc, tin, iron ore, molybdenum; crude petroleum and petroleum products, natural gas; coffee, potatoes, asparagus and other vegetables, fruit, apparel and textiles, fishmeal
- China 18.4%, U.S. 16.1%, Canada 11.7%, Japan 6.6%, Germany 4.5%, Spain 4% (2010)
- Petroleum and petroleum products, chemicals, plastics, machinery, vehicles, color TV sets, power shovels, front-end loaders, telephones and telecommunication equipment, iron and steel, wheat, corn, soybean products, paper, cotton, vaccines and medicines
- U.S. 24.7%, China 13%, Brazil 7.4%, Ecuador 4.7%, Chile 4.3%, Colombia 4.2% (2010)
Disclosure: QVM has positions in SPY as of the creation date of this article (April 4, 2012).
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