Lesser known cousins of the BRIC ETFs - Taiwan, Malaysia, South Korea and Thailand
moneyrelations :: Nov.20.2007
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An interesting article appeared in the print edition of the Economist dated Nov 15th 2007, with the heading “Dizzy in Boomtown”. It takes a look at the boom in the emerging markets.
New investors (moi) usually only hear of the BRIC countries (Brazil, Russia, India, China) but these economies might not be providing the soundest value in terms of risks/rewards.
The p/e for Chinese shares that foreigners can buy is a more modest 22, well below the 40 reached in 2000. In contrast, Indian shares, also with a p/e of 22, have never been so overvalued. And while p/e ratios of 11-12 in Russia and Brazil seem like a screaming buy, relative to their historical averages of 7-8 they look generous.
Fair enough. But compared to the extremes of the dot com era, these ratios look pretty tame.
At the other extreme, Thailand, Malaysia, Taiwan and South Korea have not only the lowest risk ratings, but also share prices that look less overvalued than elsewhere. In Thailand, Malaysia and Taiwan price/earnings (p/e) ratios are still below their 20-year average.
And maybe that’s why Warren Buffett likes South Korea.
Vanguard and Barclays ishares each offer an emerging market ETF (VWO or EEM) but the latter also offers ETT Taiwan, EWM Malaysia, EWY South Korea; I couldn’t find one for Thailand.
If you’re worried that the BRIC is a bubble, then perhaps these lesser known cousins are worth a look?
Investing ::
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guest post on my blog?
Mariam - each Thursday, I have a guest post on my blog. I think I’ve referenced your blog before, but would you be interested in actually writing a guest post for me, for next Thur? (nov 29). I’m thinking about a couple paragraphs on your very first baby steps into the investing world. Something that would encourage my readers/clients that they can do it too!
I have enough problems writing on my About page!
But sure, if you want to set me as an example of how any idiot can invest, I’d love to scrawl something on your blog.
I’ll email you with my 3 word essay: Just do it.
(Okay, I guess I can expand on that.)
Very cool, and as usual you crack me up!