EIDO ETF

Indonesia's economy has a bright outlook ahead of it in 2024. The country's Central Bank will likely be able to cut interest rates soon. The equity markets appear attractively priced, considering the favorable growth prospects.

iShares MSCI Indonesia ETF provides access to Indonesian equities, which have strong economic growth and foreign investment. The EIDO ETF is highly concentrated in the top 2 stocks, but offers exposure to Indonesia's booming economy. Consider blending EIDO with VanEck Indonesia Index ETF for a diversified portfolio of Indonesian equities.

Indonesia will go the polls on Wednesday to elect a new president to replace Joko Widodo. The vote's importance should not be underestimated.

iShares MSCI Indonesia ETF provides exposure to Indonesian markets dominated by resident banks. These are experiencing solid growth thanks to the rate regime and solid underlying economic fundamentals. The Rupiah has also been performing well as the USD rates start coming down.

iShares MSCI Indonesia ETF has underperformed EM-Asia in the past year, but we think it could be due for a comeback. We appreciate Indonesia's consistency when it comes to growth and next year it will be one of the few regions that will likely deliver improved GDP growth. EIDO is heavily exposed to the banking sector and that sector will benefit from a number of tailwinds.

The iShares MSCI Indonesia ETF remains heavily concentrated on banks. A bank-heavy investment vehicle isn't as appealing as Indonesia inches closer to monetary easing. While I still like Indonesian equities long term, the lack of near-term upside catalysts keeps me tactically neutral here.

Indonesia is the second candidate, after India, for the title of Asia's best emerging economy. Buying a fund would be a good decision for a long-term investment amid the rebuilding of the economy from a commodity country. As India's fund, the ETF in question is priced at a lower multiple.