EWM ETF

The iShares MSCI Malaysia ETF is risky due to concerns about the Ringgit, Trump tariffs, and a weaker Chinese economy. Financials and utilities dominate EWM, with Ringgit value and NIMs under pressure from tariffs and inflation complacency, which would affect USD denominated investors. High expense ratios (0.5%) also have to be contended with, assuring some return shaved off earnings yields of around 6.6%, which aren't that high compared to 3% benchmark rates there.

iShares MSCI Malaysia ETF offers investors diversification outside U.S. large-cap tech exposure. The EWM ETF tracks the MSCI Malaysia Index, giving investors access to Malaysia's growing economy with strong industries. EWM has high concentration in top holdings and financial sector, but provides exposure to various sectors in Malaysia's economy.

Malaysian stocks have begun to reverse a decade-long slump. AI-led investments are fueling a new leg of growth. The fundamental/technical setup screens favorably here.

The iShares MSCI Malaysia ETF seeks to follow the performance of Malaysian stocks, particularly focusing on financial sectors. Malaysia presents potential undervalued investment prospects as businesses shift production away from China. Weak profit growth and stagnant EPS trends are factors contributing to Malaysia's stock market lagging behind.

The iShares MSCI Malaysia ETF is heavily exposed to financials and the performance of the Malaysian Ringgit. There is potential upside for EWM due to likely monetary policy evolutions for financials and the Ringgit. The political situation in Malaysia is uncertain, but it seems to be improving, as stability in the government seems to be the main concern.

With inflation pressures swiftly cooling off, the Malaysian monetary policy stance is turning increasingly accommodative. Earnings growth estimates also remain solid despite the external headwinds. Alongside several technical tailwinds, the reasonably priced iShares MSCI Malaysia ETF could see more upside from here.

According to S&P Global Manufacturing PMI data, output growth across emerging economies excluding mainland China recorded its strongest quarterly average for 12 years in the second quarter of 2023. Monetary policy makers in emerging markets were far more pro-active in raising interest rates early to combat rising inflation than their peers in the advanced economies.