ETF Talk

ETF Talk: The Philippine Tiger Cub with a Roar

The Philippines is among the group of populous, newly industrialized Asian nations known as the “tiger cubs” that may follow in the path of the Asian tigers: Hong Kong, Singapore, South Korea and Taiwan. Emerging markets, such as the tiger cubs, generally have seen a pullback this year, with continued uncertainty in Europe and political instability from the United States. But the Philippines has notched four quarters of growth above 7%, starting in the third quarter of 2012, and is projected to continue that pace through the end of this year. If you are looking to tap that emerging-market firepower, check out the iShares MSCI Philippines ETF (EPHE).

EPHE is a non-diversified fund which seeks to match the price and yield performance, before fees and expenses, of an index designed to match the performance of the Philippine equity markets. The underlying index is a free float-adjusted market capitalization-weighted index.

Year to date, the fund is at a slight loss, due to retrenchment in August and September in anticipation of the Federal Reserve’s expected tapering of its easy-money policies. Last year’s gain, however, was 46%, in a year when the country’s economy grew by 6.6%. The fund also offers a yield of 1%, if you also like a bit of income that beats what banks now pay.

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