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Not So Far East: Investing Opportunities in Southeast Asia ETFs


The sub-region is on track for sustained growth, so what are the best levels for entry?


Another relatively new ETF issue, the Indonesia Index Fund (NYSEARCA:IDX), reached a peak in the summer of 2011 and has since held the support level of just under $25. Volume is building up around the $28-$30.50 price range. However, it wouldn't surprise me for this issue to dip below $28 and spend some time from there to $24.91 (which is obviously a better entry). Spending more time between $28-$30.50 would be a clue that it may be ready to move above it and head to test the 2011 highs.

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Vietnam (NYSEARCA:VNM) is the laggard based on the development indicators mentioned. However, if it were to follow the same path as its neighbors' ETF charts, it may provide a good opportunity to get exposure to the sub region without having to enter on charts that are near their highs. As the one country I don't have exposure to, I've been waiting for an entry closer to the recent low around $15.55. I will have to monitor this closely as I might end up going long on a slight pullback but at a higher than preferred price. If this is the case, I will enter with a smaller position and offset this with a higher than 25% second entry at a lower price. In this chart, the horizontal lines serve as resistance.

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Lastly, there is the Taiwan Index Fund (NYSEARCA:EWT). You can see that the ETF had a large 12-month drop that commenced in late 2001. It took roughly six years to recover a good portion of that drop only for it to give it all back during the financial crisis of 2008-2009. It appears that it might move towards $15 (and possibly $18), albeit the road to get there will likely be a choppy one. One thing to note on the EWT is that it acts like the QQQ in that 20% of the EWT is weighted towards a single stock – Taiwan Semiconductor Manufacturing (NYSEARCA:TSM). So this is something to consider if thinking about taking a position in this instrument.

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Thank you for reading along and I hope this article opened your eyes to a new and growing part of the world.

One final note: While I have stated my positions below, do know that when available, I supplement my stock positions with options.

This article originally appeared on the investing and economics site See It Market.
Author has positions in EWH, EPHE, EWS, EWT, EWM, THD, and IF.
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