NEW YORK (TheStreet) -- As U.S. equities continue to show signs of weakness due to fears of crippling debt in emerging Europe and a possible hiccup in the economic recovery, 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. As a region, Asia has drawn attention due to its large growth rates and its ability to emerge out of the global recession with a V-shaped recovery. Take Hong Kong, for example, whose economy grew at a seasonally adjusted 3.3% in the second quarter of the year and is benefiting from China's stellar growth. The region has been able to pull itself up by its boot straps mainly due to fiscal stimulus plans, which accounted for nearly 4% of GDP, 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 add to the region's attractiveness, most nations have kept unemployment rates relatively tame. Many big technology companies 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, Asian nations are diligently working together to construct an agreement that will free up trade, enabling them to decouple from the United States and Europe. Over time, this will help the region by lowering economic barriers, further enabling nations to develop more efficient economies of scale. Additionally, the agreement could potentially increase the inflow of foreign direct investment, which could further lead to technological advancements and even more economic growth.
Gaining access to these nations is relatively easy through the following ETFs:
iShares MSCI Hong Kong Index
, which has benefited from China's growth and stimulus package and will likely continue to do so. EWH closed at $14.52 on Monday.
iShares MSCI South Korea Index
, which holds companies like Samsung, who are expected to witness a nice uptrend. EWY closed at $43.90 on Monday.
iShares MSCI Singapore Index
, which relies on manufacturing and is expected to see signs of recovery. EWS closed at $10.54 on Monday.
iShares MSCI Taiwan
, which is being bolstered by exports to China, low interest rates and stable consumer prices. EWT closed at $11.45 on Monday.
When investing in these equities, it is important to consider factors that could potentially hinder economic growth and prosperity in these nations, such as economic bubbles in China. A good way to protect against these factors as well as the inherent risks involved with investing in equities, is through the use and implementation of an exit strategy that triggers price points at which an upward trend could potentially be coming to an end.
According to the latest data at
, the price points for the aforementioned ETFs are EWH at $14.18; EWY at $43.43; EWS at $10.30; and EWT at $11.32. These price points fluctuate on a daily basis and reflect changes in market conditions. Updated data can be found at www.SmartStops.net.
Written by Kevin Grewal in Laguna Niguel, Calif.
Kevin Grewal serves as the editorial director and research analyst at The ETF Institute, which is the only independent organization providing financial professionals with certification, education, and training pertaining to exchange-traded funds (ETFs). Additionally, he serves as the editorial director at SmartStops.net where he focuses on mitigating risks and implementing exit strategies to preserve equity. Prior to this, Grewal was an analyst at a small hedge fund where he constructed portfolios dealing with stock lending, exchange-traded funds, arbitrage mechanisms and alternative investments. He is an expert at dealing with ETFs and holds a bachelor's degree from the University of California along with a MBA from the California State University, Fullerton.