In looking at 2010 stock market returns by country, we see some similar patterns to 2009, with higher beta emerging markets leading the pack. This top 20 list was constructed to give a sense of where the money was flowing in 2010 so as to inform where we may continue to see momentum, while at the same time, pointing out where risks of significant downside may appear in the event of another global equity correction like what we saw from 2008-2009. This list was constructed to focus primarily on individual country returns, but I included gulf states and some other joint regional ETFs since those individual countries aren’t represented by a standalone ETF. Leveraged ETFs were also excluded so as to not skew individual country return results, not to mention the fact they they make for terrible long-term investments (see why all leveraged ETFs go to zero).
|THD||59%||iShares MSCI Thailand Invest Mkt Index|
|EPU||59%||iShares MSCI All Peru Capped Index|
|GXG||48%||Global X/InterBolsa FTSE Colombia 20 ETF|
|ECH||48%||iShares MSCI Chile Investable Mkt Idx|
|IDX||43%||Market Vectors Indonesia Index ETF|
|EWM||41%||iShares MSCI Malaysia Index|
|EWD||39%||iShares MSCI Sweden Index|
|EZA||37%||iShares MSCI South Africa Index|
|EWY||31%||iShares MSCI South Korea Index|
|EWW||29%||iShares MSCI Mexico Investable Mkt Idx|
|GXF||28%||Global X FTSE Nordic 30 ETF|
|EWH||27%||iShares MSCI Hong Kong Index|
|TUR||27%||iShares MSCI Turkey Invest Mkt Index|
|AFK||26%||Market Vectors Africa Index ETF|
|EWS||25%||iShares MSCI Singapore Index|
|MES||25%||Market Vectors Gulf States Index ETF|
|RSX||24%||Market Vectors Russia ETF|
|EWT||24%||iShares MSCI Taiwan Index|
|INP||22%||iPath MSCI India Index ETN|
|EWC||21%||iShares MSCI Canada Index|
Personally, I like the prospects of Colombia (GXG) and Indonesia (IDX), but for broader exposure to very fast-growing emerging market economies minus the larger Indias and Chinas, it’s worth considering Frontier Markets. Many of these markets are growing at high single digit rates and don’t face the same debt problems western nations are struggling with presently.
Disclosure: Long GXG, IDX. No other holdings in ETFs discussed in this article.