ASEAN Trade bloc that now includes Myanmar as its newest member boasts of some of the highest economic growth rates in the world. The erstwhile Burma along with the frontier markets of Vietnam and Cambodia are projected to emerge as the fastest growing nations of 2013 and analysts like Jim Rogers completely agrees. In fact Roger advocates that the gains from strategic investments in South East Asia may very well replicate the China like returns of 1980s as the economy is exactly unfolding and opening up in these parts of the world, as it did in Chinese equity markets of the mid eighties.
Foreign Investors keen to tap on these markets, out of which some are still in the in early stages of development, must consider Solactive Index controlled South East Asian ETFs. Although, exposure received is directly into the established players like Singapore and Malaysia, but their positioning as the biggest trading partners of their rapidly developing neighbours ensure direct gains that will arise from the fast growing businesses of these new found lands.
The Asian exclusive club presents infinite and safe opportunities for stock pickers to put in their hard earned cash in growing companies of this evolving region and diversify their portfolio with shares from a range of industries. Especially investing in smaller companies promise decent returns as they are low to moderately priced and yet to see their evaluations soar peak out. This strategy helps to safe guard against market instability.
The banking sector of the above province in the last year has seen a direct growth due to the consumer boom and spending of the area. Clearly the deposit growth has increased and the lending capacity too with a probability of credit being extended to first timers (people who have never received or applied for any bank loans before).
The July 2010 ASEAN summit in Hanoi saw the announcement of a plan for road and rail development across the entire region. Major global banks have shown enough interest in expanding their investments in this bloc. These nations and their governments are offering progressive pictures in terms of infrastructure and building as the state are spending on roads, bridges, power plants, ports and airports and expanding capital markets.
Myanmar a frontier market is abundant in oil and other natural resources. Yet this country is faced by challenges such as improper legal system, lack of proper banking and foreign exchange system. These impending problems can be dealt with effective planning.
Recent parliamentary victory of Suu Kyi's popular public party is an onset of a democracy in Myanmar ; a country which was the third richest nation in ASIA prior to its political exile and Suu Kyi's house arrest is now amongst the poorest among its peers.
Cambodia is also experiencing a healthy economic upsurge. It is known in recent times for a blossoming tourism industry.
Thailand with a stable economic and political policy will benefit investors in the long run.
Vietnam's ability to control inflation will be the highlight and USP of its economics.
One indirect way to gain exposure to these high risk - high reward regions is through ETFS (equity traded funds), such as the global Indice attuned Southeast Asian ETF that parallels the price and yield performance of the FTSE ASEAN 40 index.
The vital economies of the aforementioned association will grow at a swifter pace than the rest of Asia in the span of next four years or so. The GDP in Vietnam, Indonesia and Malaysia should easily grow at 7%, 5%, and 6% respectively and will be noticeably much faster and higher than the established nations of Japan (2%) and Australia (3%).
Global X ASEAN ETF [ASEA] tracks the performance of the namesake index and charges as per an annual rate of 0.65%. With about $ 43 million of assets under management [AUM], ASEA follows the 40 most traded and liquid large cap securities listed in the ASEAN exchanges. Thailand ETF and Singapore make up 49% of weight age and the top three stocks for ASEA ETF include Astra International [6.3%], Singapore Telecom [5.89%], and DBS Group Holdings Ltd. [5.86%].