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ETF Glows in China's Shadow

NEW YORK ( TheStreet) -- As I wrote Thursday, investors can develop great international exposure by using country-specific ETFs of nations such as Indonesia and Malaysia outside of the popular BRICs.

Of the BRICs, the country that gets to most attention is China, and today, I want to show investors one more option they have for international exposure that comes from just outside of China on the country's doorstep in Southeast Asia.

iShares MSCI Thailand Investable Market Index Fund (THD)

THD tracks 85 Thai companies, trades with ample volume, and carries a 0.65% expense ratio.

The fund's top holding is PTT Plc, Thailand's state-owned oil and natural gas company, which accounts for 11.1% of THD's net assets. Another 9.2% is allocated to the company's affiliate, PTT Exploration and Production Plc, which handles petroleum exploration operations.

Bangkok Bank is the second largest holding, and the financial sector is the best represented sector in THD, accounting for 36.4% of the fund. The energy sector is close behind, with 31.8% of THD's net assets. The next largest sector, materials, accounts for only 8% of the fund.

Year to date, THD has increased 2.4% and has beaten a variety of China-focused ETFs in the process.

iShares FTSE/Xinhua China 25 Index (FXI) is down 5% year to date; Claymore/AlphaShares China Real Estate (TAO) is off 4.1%; Claymore/AlphaShares China All Cap (YAO) has fallen 3.7%; and PowerShares Golden Dragon Halter USX China (PGJ) has slid1.5%. Meanwhile, Claymore/AlphaShares China Small Cap (HAO) is up only 0.2%.

Thailand also gained attention amongst investors last week when THD made my coveted weekly list of ETF winners after its five-day gain of 3.9%.

At the close of last week, there was some concern that a Supreme Court ruling to take away a large portion of the corrupt former prime minister's assets would hurt markets there, but THD has performed well this week and the political scene appears stable for now. UBS also believes that with the ruling out of the way and no immediate negative public reaction, markets will be given further room to run, according to Bloomberg.

Thailand features the cheapest equity market in Asia right now and foreign buyers looking for value helped push THD upwards last week. This trend seems set to continue as Tuesday saw enormous inflows to the country from foreign investors.
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HAO $19.53 1.90%
FXI $29.07 2.22%
THD $59.68 -1.14%
TAO $16.31 1.62%
PGJ $26.03 2.63%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

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