Five Asia ETFs That Can Continue Running Higher

Since October 3, emerging markets ETFs have been jumping higher, particularly those tracking Asian countries. ETFs with an Asian bias have been battered this year just as their Latin American brethren have been. Brazil has been the culprit dragging LatAm ETFs lower and in the Asia-Pacific region, no shocker here, but China has been the problem. India hasn't been doing anyone any favors either, but the darkest clouds may have passed Asia ETFs and even with a strong rally to start October, more gains could be in store. Keep in mind that many of these funds have bounced from at or near 52-weeks lows and many have been unjustly punished. With that in mind, here are five Asia ETFs that have rallied hard and fast but appear to have more gas in their respective tanks. Index IQ South Korea Small-Cap ETF SKOR: Last week, we highlighted the Index IQ South Korea Small-Cap ETF as perhaps the best ETF option for playing the U.S./South Korea free trade agreement. We reiterate that view along with the belief that despite a surge of roughly 14% in the past two weeks, SKOR has more gas in the tank. SKOR has outperformed the iShares MSCI South Korea Index Fund EWY over that time. Market Vectors Indonesia ETF IDX: Much has been made of Indonesian equities holding up well this year and that as a result, they suddenly do not look as cheap as other emerging markets. That may be true, but even after a 16% jump this month, the Market Vectors Indonesia ETF is still almost 18% off its 52-week high and if the emerging markets rally continues, it will be led by IDX. Alternate idea: iShares MSCI Indonesia Investable Market Index Fund EIDO. iShares MSCI Taiwan Index Fund EWT: Here are some good reasons to cozy up to EWT courtesy of Russ Koesterich of iShares: “Equities in Taiwan are also trading at a premium to other emerging markets, but the premium is modest and is justified given Taiwan's above average growth prospects. Taiwan's gross domestic product is expected to grow by 5% in both 2011 and 2012. Among other reasons to like Taiwan, the country's corporate sector is profitable with a return on assets of 11.2%, well above the global average. Taiwan's dividend yield of roughly 4.5% is also well above the global average.” Enough said. iShares MSCI Philippines Investable Market Index Fund EPHE: Though not immune to the sell-off in EM ETFs, the iShares MSCI Philippines Investable Market Index Fund held up well by comparison to other Asia ETFs. Since the downside was somewhat limited, upside may be as well. However, if EPHE can break resistance at $23.60, it could return to over $27. First Trust ISE Chindia Index Fund FNI: The First Trust ISE Chindia Index Fund is all about China and India. Well, in the top-10 holdings, FNI leans toward to China, but its hard to imagine Asia ETFs rallying further without the help of China. FNI isn't a bad idea for investors looking to play further rebounds in Baidu BIDU, Sina SINA and other Chinese ADRs.