NEW YORK ( TheStreet) -- As U.S. equities continue to show signs of instabilities due to fears of crippling debt, deflation and high unemployment, many have turned to alternative regions, in particularly Asia to seek returns.
When speaking of Asia, the first nation to come to mind is China, but there are many more nations that are likely to continue to outperform the world's second largest economy. As a region, Asia has drawn attention due to its large growth rates, insatiable demand for commodities, cheap labor and increasing private consumption.
Take Singapore for example, whose economy grew at a seasonally adjusted 18.1% in the first half of the year and is benefiting from China's stellar growth. The countries in the region have been able to pull themselves up by their boot straps, mainly due to fiscal stimulus plans, which accounted for nearly 4% of GDP, and were higher than any other region of the world.
Government stimulus packages have been successful in Asian nations due to low consumer debt, and a high propensity to save. This way of life has lead these nations to further develop and enable incomes to rise, which will likely cause the domestic demand for goods and services to increase as well. In fact, demand from domestic consumption is expected to add nearly 7% to the growth rate of the smaller emerging nations of Asia.To further add to the region's attractiveness, most nations have kept unemployment rates relatively tame, many big technology companies in the region are increasing capital-expenditure projections, and the International Monetary Fund has openly stated that it expects the region as a whole to continue to grow. Lastly, China and Taiwan recently signed the Economic Cooperation Framework Agreement, which will remove tariffs on 539 Taiwanese products within three years and improve trade between China and Taiwan, further strengthening the region. Gaining diversified access to the region is relatively easy through the following ETFs: PowerShares FTSE RAFI Asia Pacific ex-Jp (PAF), which allocates 34.5% of its assets to South Korea, 14.9% to Hong Kong and 7.5% to Singapore. PAF closed at $47.01 on Friday. SPDR S&P Emerging Asia Pacific (GMF), which allocates 35.6% of its assets to China, 28.2% to Taiwan, 20.3% to India and 6.2% to Malaysia. GMF closed at $77.63 on Friday. iShares S&P Asia 50 Index (AIA), which allocates 28.6% of its assets to South Korea, 22.6% to China, 21.1% to Taiwan, 17.3% to Hong Kong and 10.3% to Singapore. AIA closed at $40.69 on Friday. iShares MSCI All Country Asia ex Jpn Idx (AAXJ), which allocates 27.2% of its assets to China, 17.4% to South Korea, 13.3% to Taiwan, 11.6% to Hong Kong and 11.6% to India. AAXJ closed at $56.97 on Friday.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV