Three Ways to Play Asia's Rise

08/12/2009 1:00 pm EST

Focus: ETFS

Jim Lowell

Senior Partner & Chief Investment Strategist, Adviser Investments

Jim Lowell, editor-in-chief of Forbes ETF Advisor, recommends three ETFs that have more than 50% of their assets invested in Pacific Rim countries

China, the world’s third largest economy and second largest stock market, is growing again without the aid of any other global economy’s consumer in tow.

So, how is China growing this time around and what does it mean for long-term investors like us? To a certain degree, you can “credit” China’s ability to manipulate stimulus money and their own economy.
 
Politics aside, the question isn’t whether or not the cures provided by China and the US will ultimately save or kill the global market patient. The question is whether or not, despite political interventions, the markets at home and abroad will heal themselves. As I have been saying since last October, I think they will.

I want to make sure every [reader] is up to speed on the most remarkable lineup of Pacific Rim plays (in both quantity and quality) from every ETF family. The following ETFs have at least 50% of their assets invested in countries that are a part of the Pacific Rim, and are on my China watch list as a result.

iShares MSCI Pacific ex-Japan (NYSEArca: EPP) seeks investment results that correspond to the price and yield performance of the MSCI Pacific ex-Japan Index. It has a market value of over $2.8 billion and began trading in October 2001. The top three country representations are Australia (65.1%), Hong Kong (21.5%), and Singapore (11.7%). The top three sectors are financials (46.5%), materials (17.4%), and industrials (7.8%). The top holdings [include] BHP Billiton, Westpac Banking, Wesfarmers, Sun Hung Kai Properties, and Woodside Petroleum.

Vanguard Pacific (NYSEArca: VPL) seeks investment results that correspond to the price and yield performance of the MSCI Pacific Index. It has a market value of $1.3 billion and began trading in March 2005. The top three country representations are Japan (67.5%), Australia (21.6%), and Hong Kong (6.8%). The top holdings [include] Toyota Motor, BHP Billiton,  Commonwealth Bank of Australia, Honda Motor, Canon, National Australia Bank, and Tokyo Electric Power.

WisdomTree Pacific ex-Japan Total Dividend (NYSEArca: DND) seeks investment results that correspond to the price and yield performance of the WisdomTree Pacific ex-Japan Dividend Index. It has a market value of almost $107 million and began trading in June 2006. The country breakdown is Australia (51.1%), Hong Kong (32.6%), Singapore (14.3%), and New Zealand (1.8%). The top three sectors are financials (38.1%), telecom services (18.9%), and industrials (11.2%). Top holdings [include] China Mobile, Telstra, CNOOC, Hang Seng Bank, and SingTel.

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