Make Money on 'Innocent Bystander' ETFs

The iShares Singapore ETF won't reduce portfolio volatility. According to the iShares Web site, the fund has a beta of 1.56, compared with 1 for the S&P 500. The higher the number, the more volatile the fund. Also, stock prices in Singapore won't be immune from any sort of regional or global crisis. During the Asian contagion that originated in Thailand in 1997, stocks in the benchmark Straits Times Index dropped 60% in a little over six months. And during the current crisis that started in the U.S., the Strait Times Index again fell 60%. The country is on a much stronger fundamental footing, but the volatility has been, and will likely be, extreme.

The big difference, though, is that the economic event as it's unfolding in Singapore is much closer to a normal contraction than in the U.S.

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