The population which makes up the Association of South East Asian Nations (ASEAN) looks set to become an even more powerful force in world trade next year. Investors could consider gaining relevant exposure through US-listed exchange-traded fund (ETF) Global X Southeast Asia ETF (ASEA:NYSE).
Emerging economies including Indonesia, the Philippines and Vietnam as well as Myanmar, which is just opening its doors to capitalism, are forming a single trade bloc called the ASEAN Economic Community (AEC) in 2015, representing an estimated 600 million people. The initiative will further integrate the region into the world economy and could lead to ‘superior risk-adjusted returns for investors compared to other emerging markets’, according to SooHai Lim, investment manager of the Baring ASEAN Frontiers Fund.
Investors looking for a pure play UK market-listed investment on ASEAN stocks will be struggling as there are few products in the Asia-Pacific region that do not include regional heavyweights China and Japan. Insurer Prudential (PRU) has significant operations in the Asia-Pacific region, as does the bank Standard Chartered (STAN). Investors could also consider Premier Oil (PMO) as a way of playing the theme: it generated nearly half its revenues from Indonesia and Vietnam in the six months to June 2014.