Time to Buy Thailand & Philippines ETFs? - ETF News And Commentary
March 21 2013 - 8:56AM
Zacks
Thailand and Philippines stock markets saw the year’s worst
downfall earlier this week. The immediate Cyprus bailout
requirement, which has flared up euro zone crisis again, was
responsible for the fall in these two Southeast Asian nations.
Thailand’s SET Index dropped 1.8% yesterday – the biggest
three-day fall since May 2012. This weak performance also pushed
the country’s ETF lower. The iShares MSCI Thailand
Investable Market Index ETF (THD), which tracks the MSCI
Thailand Investable Market Index, lost 0.80%.
The fund holds 91 securities in its basket that are somewhat
concentrated from both sector and individual security perspectives.
Siam Commercial Bank, PTT PCL and Advanced Information Service are
the top three holdings. Siam Commercial Bank, which was the top
loser yesterday, lost 2.7% and it alone makes up for 7.7% of the
fund’s assets.
Banks comprise roughly two-fifths of the total assets while
energy companies make up another one-fifth. This product has
amassed $1.1 billion in its asset base while charging 60 bps in
fees per year from investors. (read: Top Ranked Thailand ETF in
Focus)
The Philippine Stock Exchange Index tumbled 0.8%, marking the
eight consecutive session of decline. It lost 6.4% from the
all-time high of March 11. As such, the iShares MSCI
Philippines Investable Market Index Fund (EPHE) fell 2.8%
in a single trading session. The fund tracks the MSCI Philippines
Investable Market Index and holds 42 stocks in its basket.
The lackluster performance of the fund was due to its heavy
exposure (42.4%) to the financial sector. Industrials take the
second position with 25.4% share while the other sectors make a
nice mix in the portfolio. Further, the product is
concentrated in the top 10 holdings with more than 59% of
investment .(read: Philippines ETF: Can the Run Continue?)
Among individual holdings, SM Investments Corp, Ayala Land and
SM Prime Holdings occupy the top three positions with 11.2%, 8.1%
and 6.4%, respectively, of EPHE’s assets. The fund has managed
assets worth $388.3 million so far this year while charging 60 bps
in annual fees.
Investors should note that both ETFs were on the list of the top
performing funds in the emerging market ETFs. THD has added 12.3%
in the year-to-date period while EPHE gained 10.1% in the same time
frame. (see more in the Zacks ETF Center)
Currently, both ETFs have a Zacks ETF Rank of 1 or ‘Strong Buy’,
suggesting that the products are expected to outperform the broad
markets over the long term. Given the solid macro views and strong
economic growth, Thailand and Philippines appear well poised for
future growth.
As a result, investors could treat this temporary sell-off as an
attractive entry point.
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ISHARS-EMG MKT (EEM): ETF Research Reports
ISHARS-MS PH IM (EPHE): ETF Research Reports
ISHRS-MSCI THAI (THD): ETF Research Reports
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