Five New Global Leaders Spell MINTS
http://blogs.investors.com/capitalhill/
By Trang Ho Thu., Aug. 04, 2011 2:56 PM ET
Despite the global sell-off, some foreign countries may be good investments. About half of the major single-country ETFs have fallen into a bear market or on the brink of it. A bear market is technically defined as a 20% drop or more from a 52-week high. A drop of 10% or less is defined as a normal, healthy pullback. A 10% to 20% drop is a correction.
As the saying goes, there’s always a bull market somewhere. Fly west across the Pacific Ocean and you will find five countries still overrun by bulls: Malaysia, Indonesia, New Zealand, Thailand and Singapore, or MINTS.
They’re all trading within 6% of their 52-week highs. And near their 10-week moving average — unlike the S&P 500, which sank below its 200-day line this week. That’s a real sign of weakness and a commonly used selling signal.
Here’s an overview of their ETFs, year-to-date returns and trailing 12-month gains:
iShares MSCI Malaysia Index Fund (EWM): +2% ytd, +19% 1-yr
Market Vectors Indonesia Index (IDX): +13% ytd, +29% 1-yr
iShares MSCI New Zealand Investable Market Index Fund (ENZL): +10% ytd, +24% 1-yr
iShares MSCI Thailand Index Fund (THD): +6% ytd, +33% 1-yr
iShares MSCI Singapore Index Fund (EWS): -1% ytd, 10% 1-yr
By contrast, the iShares MSCI Emerging Markets (EEM) is down 9% year to date and up 3% in the past 12 months. The SPDR S&P 500 is down 3% and ahead 8% in the trailing year.
Most of these ETFs’ gains have come from dollar depreciation. Gains earned in foreign currencies convert to more dollars the weaker the greenback is. When the global markets rebound, the MINTS should head even higher as strength begets more strength. A major risk is the dollar suddenly rallying, which would deteriorate gains earned in a foreign currency.
By Trang Ho Thu., Aug. 04, 2011 2:56 PM ET
As the saying goes, there’s always a bull market somewhere. Fly west across the Pacific Ocean and you will find five countries still overrun by bulls: Malaysia, Indonesia, New Zealand, Thailand and Singapore, or MINTS.
They’re all trading within 6% of their 52-week highs. And near their 10-week moving average — unlike the S&P 500, which sank below its 200-day line this week. That’s a real sign of weakness and a commonly used selling signal.
Here’s an overview of their ETFs, year-to-date returns and trailing 12-month gains:
iShares MSCI Malaysia Index Fund (EWM): +2% ytd, +19% 1-yr
Market Vectors Indonesia Index (IDX): +13% ytd, +29% 1-yr
iShares MSCI New Zealand Investable Market Index Fund (ENZL): +10% ytd, +24% 1-yr
iShares MSCI Thailand Index Fund (THD): +6% ytd, +33% 1-yr
iShares MSCI Singapore Index Fund (EWS): -1% ytd, 10% 1-yr
By contrast, the iShares MSCI Emerging Markets (EEM) is down 9% year to date and up 3% in the past 12 months. The SPDR S&P 500 is down 3% and ahead 8% in the trailing year.
Most of these ETFs’ gains have come from dollar depreciation. Gains earned in foreign currencies convert to more dollars the weaker the greenback is. When the global markets rebound, the MINTS should head even higher as strength begets more strength. A major risk is the dollar suddenly rallying, which would deteriorate gains earned in a foreign currency.
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