Here’s Why I’m Still Bullish on Asia

It’s no secret that I’m super-bullish on Asia. And the first half of the year has backed me up: Asian-country ETFs had an impressive first six months with total returns far outpacing their counterparts.

Just take a look at the table below, provided from Pension Partners.

You can see that of the 45 country ETFs, the U.S. was well toward the bottom of the list. Indeed, more than 75 percent of the other country ETFs outperformed SPY. And the Asian-country ETFs clearly dominated …

Here are some highlights from that region:

• South Korea (EWY) led the Asian-country ETFs with a total return of 27.4 percent.
  
• Hong Kong (EWH), Taiwan (EWT), Singapore (EWS), and India (PIN) all finished the first half with returns that more than doubled that of the U.S. total returns.
  
• China (FXI), Vietnam (VNM), Malaysia (EWM), and Indonesia (EIDO) all closed out the first half respectively, with total returns near 15 percent each.
  

Here’s why I’m still bullish on China and the rest of Southeast Asia …

It’s not just these stellar first-half results that have me stoked about China and Asia. Consider …

China is home to the world’s second-largest economy. And it is already an industrial and economic power. China has been the world’s manufacturing hub for a generation.

Plus, it also has the world’s largest middle class, which is expected to be over half a billion people in just a few short years.

The Chinese middle class is also earning more money and has more disposable income than ever before. So, I expect to see China’s consumer and overall economic growth continue to flourish as consumers buy more stuff.

I believe what the world has seen so far is only a preview of the growth and opportunities to come in the Red Dragon.

Case-in-point: China’s huge “one belt, one road” initiative will speed up trade links between the East and West, changing lives throughout the entire region. Now, with $1.3 trillion worth of projects underway in the region, this massive undertaking is set to transform the entire global economy – not just China’s and its Asian neighbors.

The bottom line: I expect the China ETF and other Asian-country ETFs to continue to outperform their U.S. counterparts in the second half of the year and beyond. So, if you are not already invested, you can go ahead and buy one of the country ETFs highlighted in the table above.

Good Investing,

Mike Burnick