After years of being snubbed by the European Union, Turkey has turned to its immediate neighbors for economic enrichment. As a result, Turkey’s economy and ETF could continue to see gains next year.

In the last couple of years, Turkey economy has been augmented by increased exports to its Middle East and north African neighbors, extending pipelines for transferring energy, more air traffic and a number of infrastructure projects, according to The Economist.

Below is a table in order of the sum of the 3, 6, and 12 month returns for individual country ETFs. Each column represents returns for various timeframes and the percent each ETF is above (or below) the 200 day moving averages as of the close October 30th. Note that all country ETFs are above their 200 day moving average. The top 5 based on the sum of the 3-6-12 month returns are below. Last month we saw resource rich countries at the top of the list: Australia (EWA), Brazil (EWZ), and Russia (RSX). Turkey (TUR) and Thailand (THD) rounded out the list. At the end of October, the top 5 are: EWZ, TUR, THD, Austria (EWO), and RSX.

One potential strategy investors could use would be to purchase the top ETFs based on the sum of their returns over 3, 6, and 12 months. Or, one could purchase ETFs based soleley on 6 month returns (a strategy featured on ETF Screen). An additional twist would be to only purchase the top performing ETFs if they are also above the 200 day moving average.

<< Return to page 1 - Market-Related Whiplash

Emerging-market countries have gathered their composure with grace, and emerging market related ETFs have bounced back to impressive heights since the March 9 low. Let’s take a look at five emerging countries that have shown some robust gains.

Turkey. Turkey is rapidly developing and there’s no indication that the economy needs aid from the International Monetary Fund. Growth in the economy could likely accelerate in 2011 after a return to growth in 2010. Turkey’s market index has been driven up by the banking sector, which makes up around 40% of the market. Bank earnings have been bolstered by a series of rate cuts that have reduced interest on customers’ deposits as lending rates remain high.

Below is a table in order of the sum of the 3, 6, and 12 month returns for individual country ETFs. Each column represents returns for various timeframes and the percent each ETF is above (or below) the 200 day moving averages as of the close September 30th. Note that all country ETFs are above their 200 day moving average. The top 5 based on the sum of the 3-6-12 month returns are below-- at the end of July 3, the top ETFs were China related. Last month we saw a more diversified mix of strength and the absence of China: TUR (Turkey), EWD (Sweden), EWY (South Korea), EWP (Spain), EWO (Austria). At the end of September, there is a resource theme - 3 of the countries in the top 5 are resource rich. The country ETFs with highest momentum are TUR, THD (Thailand), EWZ (Brazil), EWA (Australia), RSX (Russia).

One potential strategy investors could use would be to purchase the top ETFs based on the sum of their returns over 3, 6, and 12 months. Or, one could purchase ETFs based soleley on 6 month returns (a strategy featured on ETF Screen). An additional twist would be to only purchase the top performing ETFs if they are also above the 200 day moving average.

With the third quarter drawing to a close and a possible economic recovery beginning to take place, many investors who have been sitting on the sidelines are anxious to get back into the market and put their money to work again. With overriding fears about inflation and concerns about the U.S. dollar, many investors are turning to international markets for investment opportunities.

It’s about time.

Turkey’s economy and relate ETF has strengthened enough to be left to its own devices. Recovery may be slow, but the country is now capable of standing without outside help.

International Monetary Fund Chief Dominique Strauss-Kahn stated that there is “no need now” for Turkey to agree on a loan deal, but the IMF is open to dealings if necessary writes Ibon Villelabeitia for Reuters. Turkey is rapidly developing and has a strong economy, with no indication that the economy needs aid from the IMF at this point, Strauss-Kahn said.

When many people talk about emerging markets, chances are that the BRICs are part of the conversation. Brazil, Russia, China and India have all gone through such expansive growth that there are even ETFs devoted just to those countries. But what if you’re tired of them?

India’s economy is forecast to see “definite signs of recovery” in the second half of the current fiscal year, reports The Economic Times. Growth is predicted to be in the 6% to 6.5% range. But there are a number of investors who want to expand their horizons beyond the BRIC countries.

The Top 10 Banks of Turkey based on Assets as of December 2008 are shown below:

Source: Banking in CEE: Challenging Times but Recovery on the Horizon by UNICREDIT TIRIAC BANK S.A.

<< Return to page 1 - Much Overbought, from Many Perspectives

Returns from emerging markets stocks are highly correlated to those from U.S. stocks. Also, many people believed that those countries’ growth prospects were hardly a secret, and they had been more than priced into stocks. Still, from price/earnings to growth (PEG) ratio point of view (a ratio used to determine a stock's value while taking into account earnings growth, according to Investopedia), emerging countries’ PEG is still better than SPY’s, which is 1.4.

From a total of 835 ETFs, I filtered out those ETFs with net assets less than $100 million and average volume less than 100,000. Below are 30 emerging market ETFs, along with their PEG and Price to Cash Flow (CF) ratio.

The growth prospects for Turkey’s economy and ETF have been the subject of much debate. Some believe that the focus should be on the economy, while others believe that political changes need to take place before the economy can truly prosper.

Growth in Turkey will occur, say most analysts, but perhaps the only area in which it will not take place is the economy. The democratic country does have a bad imbalance of wealth distribution, and this undermines the social and cultural problems as well, explains Turkish NY.

Below are the 20 hottest ETFs (excluding leveraged funds) at the end of August, based on the 6 month performance. Data excludes leveraged ETFs and the data source is FINVIZ.com. The theme? Financials, unlike last month which featured China as a staple. A link is available on the right hand side of Scott's Investments with this data updated monthly.

Please note that with anything I write I'm not recommending the purchase of any particular security. This is especially true here - there is no trading strategy I am advocating with this list. However, it is helpful in determining where market trends and momentum exist. For one potential strategy utilized by portfolio123.com and backtested by Fidelity, investors who purchased the top performing ETFs based on 60 day returns did quite well (click here to read the full results). For more detailed momentum strategies, visit my blog or pick up a copy of Mebane Faber's The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets. Now, the list:

Global factory business activity expanded in August for the first time since May 2008 in a broad-based revival, witnessed especially in the United States and Japan, according to the global PMI index, produced by JP Morgan. The index rose to a 26-month high of 53.1 in August.

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Below is a table in alphabetical (ticker) order for the individual country ETF momentum and 200 day moving averages as of the close August 31st. Note that all country ETFs are above their 200 day moving average. The top 5 based on the sum of the 3-6-12 month returns are below-- last month 3 of the top ETFs were China related. This month we see a more diversified mix of strength and the absence of China: TUR (Turkey), EWD (Sweden), EWY (South Korea), EWP (Spain), EWO (Austria).

The spreadsheet has been posted in the right hand column along with several others under 'ETF & Timing Portfolios' on Scott's Investments and will be updated monthly.

As equity markets begin to recover, many are flirting with ten month highs, and related ETFs are enjoying the gains.

As the major equity markets are starting to build up to 10-month highs, some have even surpassed them, and certain ETFs are reflecting the success. Billy Fisher for Investopedia noted some of the top ETFs, and we’ve thrown in a few of the ones we’ve noticed, as well.

Here is Brazil and Colombia (two of the stronger emerging market names):

In early 2000, there were a handful of indexes that may have climbed more than 20 percentage points above a long-term trendline. You probably could have counted a number of individual companies that made it to 30% above the 200-day moving average.

Right now? Hundreds of diversified index funds are more than 20% above the ever-popular 200-day MA. In fact, the PowerShares QQQ (QQQQ), the S&P MidCap 400 (MDY), and the iShares Russell 2000 (IWM) are among them.

<< Return to page 1 - Summer Doldrums

The CFTC’s Gensler strikes again, this time intimidating iShares from issuing new shares of its commodity tracking fund, GSC (GS Commodity Index Trust) until they understand how they can deal with proposed new position limits in various commodity markets. They’ll probably all have to turn to swaps and do those deals with, guess who, Goldman Sachs (GS), Commissar Gensler’s former firm. Is the CFTC fixing things, or just breaking things willy-nilly? Methinks the latter.