This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Reversal of Fortune: Asia ETFs Lead the Way After 2-Year Hiatus

Stocks in this article: ENZL EPHE EIDO EWA AAXJ EWH EWM EWY SPY QQQ

NEW YORK ( ETF Expert) -- Nearly two months ago, Ben Bernanke announced an open-ended promise for the Federal Reserve to purchase $40 billion in mortgage-backed bonds every month. Prior to the Sept. 13 announcement, investors expected another round of electronic money printing, yet the size and scope of the plan exceeded everyone's expectations. U.S. stocks surged to multi-year highs through the Sept. 14 close.

Shortly thereafter, however, U.S. stock assets began to weaken. Not only were corporate revenue reports decidedly weak in October, but many chose to exit riskier assets prior to the presidential election and the subsequent "fiscal cliff" debate.

Realistic fears that the same cast of characters may stumble in their efforts to reach an agreement has seen many investors selling first and asking questions later. The S&P 500 has already forfeited 6.3% over the last eight weeks.

That said, not every stock ETF has lost ground since Sept. 4. Asian ETFs have actually held steady.

Keep in mind, China's inflation has slowed, its manufacturing has picked up and its leaders have plenty of conventional fiscal and monetary policy tools at their disposal. In other words, the circumstances are enormously beneficial to regional players that support the world's second-largest economy.

Not sure that the worst is over in Asia? Take a look at the recent returns throughout the Asia-Pacific region:

Here's how these Asian ETFs performed over the eight weeks from Sept. 17 to Nov. 9:

iShares MSCI Philippines (EPHE), 3.6%

iShares MSCI Indonesia (EIDO), 1.7%

iShares MSCI Australia (EWA), 0.0%

iShares MSCI New Zealand (ENZL), -0.1%

iShares MSCI All Asia excl Japan (AAXJ), -0.6%

iShares MSCI Hong Kong (EWH), -1.7%

iShares MSCI Malaysia (EWM), -1.8%

iShares MSCI South Korea (EWY), -5.3%

By comparison, the S&P 500 SPDR Trust (SPY) is off 5.7%, the S&P 500 is down 6.3% and the PowerShares QQQ NASDAQ 100 (QQQ) is down 9.4%.

In commentary from previous months, I talked about changes in the economic landscape as well as the relative strength that Asian Neighbor ETFs were demonstrating. For example, in "Asia Pacific ETFs Become Relative Strength Standouts," I chronicled the progress of the region's ETFs over a 10-week period from mid-July. Funds like ENZL had already moved from a relative strength factor score in the 50th percentile to the 90th percentile.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,210.67 +19.30 0.11%
S&P 500 1,994.48 -7.68 -0.38%
NASDAQ 4,618.2640 -19.73 -0.43%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs