iShares MSCI Malaysia Index Fund (ETF) (EWM)

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Riding the wave.

Posted by intelledgement on Tue, 21 Jul 09

As those who were with us when we launched this portfolio back at the end of 2006 may recall, Malaysia is one of our favorite places to invest outside of the USA, and the iShares MSCI Malaysia Index ETF was one of our original 11 positions ( http://intelledgement.wordpress.com/2007/01/02/msci-malaysia-index-ewmlong/ ). But in March 2008, we liquidated the position ( http://intelledgement.wordpress.com/2008/03/13/sell-msci-malaysia-index-ewm/ ) at a profit (ROI of 29% and CAGR of 24%), as we moved to a more defensive stance.

Now that we are lightening up on our shorts, we are looking to increase our long exposure and EWM looks good here, at virtually the same price we got it at back in January 2007. Meantime, conditions for business in Malaysia remain strong. Their per capita GDP is up from $14,200 in 2006 (the latest number we had in January 2007 was $12,900 in 2005) to $15,300 in 2008. For comparison’s sake, they are just behind Russia ($15,800) but well ahead of Brazil ($10,100), China ($6,000), and India ($2,800)…not to mention Mexico ($14,200), Turkey ($12,000), and Thailand ($8,500), to name a few. The BRIC countries are all growing faster, and GDP growth was down in 2008 to +5.1%, but that still looks good from here (the USA was +1.3% in 2008).

The iShares MSCI Malaysia Index exchange-traded fund ( http://us.ishares.com/product_info/fund/overview/EWM.htm ) is heavily weighted towards financial services (31%) and industrials (20%), aptly reflecting the sweet spots of the Malaysian economy. There is also significant representation for consumer staples (15%), consumer discretionary (13%), utilities (13%), and telecom (7%), reflecting the high income levels of the populace. The P/E ratio is running around 16 and the yield is 3%. EWM is moderately traded (1.2MM shares/day).

just because i can go this long, right here I will, not because i want to.

attractive level and time to start shopping these overseas etfs

Short term underperform as the US consumer suffers.

New infrastructure not enough.

Growth in the developing countries of Asia will continue to be stronger than in the industrialized countries. Malaysia is an interesting and cost effective place for outsourced manufacturing competing with countries, where cost increases rapidly.

Malaysia is under the radar compared to China. Should outperform.

Testing out a portfolio of smallish-cap 5-star stocks found using the CAPS screener. All picks have at least 50 allstars backing them, which should be enough to minimize star rating fluctuations. It's been less than a week, but so far so good!

One of lowest P/E and PEG markets found in the world. 3+% yield. Long term hold.

14% position on this fund heavy on Malysian financial sector. Malay Gov't reducing controls to take advantage of export. I am betting on SE asia profiting the most from a weak dollar so position is heavy in SE Asia funds. Picked up at $12.49 on 1/22

Palm oil, smart population.

I don't think a recession will hit China or Malaysa any time soon.

Indirect China/Asia play

Malaysia is an area many ignore when thinking about Asia. However the iShares fund is well managed and continues to generate returns.

5 stars

Malaysia cheaper than China and great prospects

Malaysia is a country that should be one of the richest in the world. Young population, natural resources , oil exporter, democratic govt. ( corruption is an issue). Think this ETF is a good bet for a long steady riser.