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One of our themes at the FRED Report (

) has been that the economic growth story is alive and well globally and that astute investors can use ETFs to participate in this international growth. In today's article, we will focus on Asia.

One of our favorite ways to measure domestic economic growth vs. multinational growth is to analyze small vs. large cap indices, as most small-cap companies derive their growth from domestic business and not international activities.

This works across all markets, including the United States. Note the outperformance of the

S&P Midcap 400 ETF

(MDY) - Get SPDR S&P Midcap 400 ETF Trust Report

from 2000 to 2010, when compared to the

S&P Depositary Receipts

(SPY) - Get SPDR S&P 500 ETF Trust Report


This is because, for many years, the U.S. has been the "engine" of worldwide economic growth. Now, some economists are suggesting that the "growth engine" is switching to China. What do the markets themselves say about this?

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When we look at China, for example, we see that the

Claymore/Alpha Shares China Small Cap

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TheStreet Recommends

(HAO) - Get Invesco China Small Cap ETF Report

, a small-cap Chinese ETF, is outperforming the

FTSE/Xinhua China iShares 25 Index

(FXI) - Get iShares China Large-Cap ETF Report

on a longer-term basis.

This comparison suggests that the Chinese story of domestic economic expansion and earnings relative to foreign earnings growth is alive and well. In fact this morning, the Chinese government noted more goods as it moves forward will come from internal production.

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We contrast that with Japan for the same time period where the

Japan Smaller Capitalization Fund

(JOF) - Get Japan Smaller Capitalization Fund Inc Report

is lagging the

MSCI Japan iShares Index

(EWJ) - Get iShares MSCI Japan ETF Report

an index of large cap, multinational Japan, because Japan is an export-driven economy without a lot of domestic consumption.

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While China is a way to profit from international growth, there are some lesser-known ETF's that deal with the growth story in Asia that are worth looking at. One is the

MSCI Singapore iShares Index

(EWS) - Get iShares MSCI Singapore ETF Report


Another is

MSCI Malaysia iShares Index

(EWM) - Get iShares MSCI Malaysia ETF Report

. While both of these markets are a bit more speculative, they are also outperforming China and Japan, and we expect this trend to continue. Singapore especially is a more developed economy, and one that sells to China.

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From the above, we conclude that investors wishing to have a growth component to their portfolios should look at the Asian markets. These markets, in the last year, are performing better than some of the U.S. indices and look to be a worthwhile addition to portfolios.

Fred Meissner is founder and publisher of

The Fred Report

. Fred is a CMT and past President of the Market Technicians Association (MTA). He recently left Merrill Lynch's Market Analysis Department and Sector Strategy Department to form The Fred Report. A detailed bio is here:

Fred Meissner