The 5 Largest Country Specific ETFs

In this post, lets take a look at some of the five largest iShares ETFs that focus on a specific country.

Emerging market stock market indices have plunged considerably in the past few months due to crash in commodity prices, slowdown in the US economy, credit crisis, etc. In light of this it is a neat idea to checkout which countries are still the favorites for investors. One simple way to identify these countries is to analyze the country specific ETFs that trade on the markets on a daily basis. Since iShares is the leader in this arena, I have used iShares’ ETFs for this study.

The five largest (based on Net Assets held as of 9/26/2008) country specific iShares ETFs are:

1. The iShares MSCI Japan Index Fund (EWJ)
Total Net Assets = $6.9 B

2. The iShares FTSE/Xinhua China 25 Index Fund (FXI)
Total Net Assets = $6.2 B

3. The iShares MSCI Brazil Index Fund (EWZ)
Total Net Assets = $5.9 B

4.The iShares MSCI Taiwan Index Fund(EWT)
Total Net Assets = $2.3 B

5. The iShares MSCI South Korea Index Fund (EWY)
Total Net Assets = $1.9 B

The above list is interesting since except Brazil all the other four are Asian countries. There are some investors who believe that Asia-Pacific countries will perform better in the future when compared to Latin America and Europe. Maybe this logic is confirmed by our list above. I am not sure.

Anyway Japan’s ETF JXI has the most assets at $6.9B. With the market in flat-to-down mode for many years in Japan, not sure why the big interest in Japanese stocks. China is another story. I believe The Shanghai Index has crashed over 60% year to date after the bubble popped there. Still it is amazing to see that $6.2B is in this fund (JXI). Today Fellow blogger TG has a post via Bloomberg that states ‘China Allows Short Selling and Margin Purchases‘. We will watch how this impacts JXI .

Brazil is a perennial favorite for investors looking for exposure to Latin American markets. Brazil has built a strong economy with many good government policies. But still the economy is heavily dependent on commodities. So EWZ has fallen in sync with other emerging market ETFs recently. However unlike China, India and Russia, Brazil has vast natural resources and a stable democratic political system.

The economy of Taiwan is a export oriented with a heavy focus on contract manufacturing of tech products like semiconductor chips, monitors, laptops, etc. With the technology stocks holding up better than the battered financials in this market, the Taiwain ETF EWT is down only about 14% Year-To-Date.

South Korea is known for its steel, ship building and electronics manufacturing. Unlike EWT, the Korea ETF EWY is down 32% Year-To-Date.With assets close to $2B and a stable political system it is definitely worth keeping an eye on.

Leave a Reply

Your email address will not be published. Required fields are marked *