Asian ETFs: On Track for Dominance?

Includes: ADRA, EWA, VPL
by: Tom Lydon

According to the International Monetary Fund (IMF), it won’t be long before Asia accounts for roughly one-third of the world’s output. This only underscores the importance of having an international allocation in your portfolio. The IMF says that based on expected trends, Asia’s economy – including Australia and New Zealand – will be about 50% larger in about five years. Colin Brinsden for The Sydney Morning Herald explains that it would make the continent’s economy equal to the heft of that of the United States or Europe.

In 20 years, Asian GDP is forecast to rival that of the of the Group of Seven (G7) industrial economies – United States, Japan, Britain, France, Germany, Canada and Italy. Asia’s emerging economies could double their share of world trade and triple their share of world GDP.

Asia is making a stronger contribution to the global recovery than any other region, and continues to grow by strong domestic demand and healthy exports.

As these economies grow in dominance on the world stage, look to broad ETFs to get your exposure and use them in conjunction with a trend following strategy, since the path to growth hasn’t always run smoothly.

  • iShares MSCI Australia (NYSEArca: EWA)
  • Vanguard Pacific Stock VIPERs (NYSEArca: VPL)
  • BLDRS Asia 50 ADR Index (NYSEArca: ADRA)

Tisha Guerrero contributed to this article.