Indonesia ETF

Indonesia is a huge country, one of the largest in Asia. As Indonesia consists of a wide variety of islands it is not a homogeneous country. Especially the larger islands nurture their specific backgrounds and characteristics.

These social and geographical differences bring about structural distinctions in the economies of these different islands. All in all it is not easy to truly comprehend the Indonesian economy.

Indonesia is historically rich in a great variety of basic materials and resources and the same goes for producing crops of all sorts. Most striking however is the relatively young population of this large Asian country.

Education is at a high level so things look bright for Indonesia. Add to that the inborn commercial spirit of the average Indonesian and you will directly grasp its potential. In my opinion Indonesia for sure will enter a long period of structural growth.

Mind, there are some pitfalls to avoid. Corruption and political problems are the first things to come to mind. Maybe the largest thread is growth itself as many Asian countries have the tendency to grow a little too fast.

The counterpart of this growth often translates in huge debts to Western countries. If things turn out wrong you will find typical solutions in devaluating the local currency which makes these Western investors leave the country to never come back again.

If Indonesia will be able to constraint itself in walking a more solid path to growth and keeping foreign moneylenders at bay then it will be able to build a very solid economy for years to come.

As we speak this ideal situation is not a reality so we have to beware of sharp corrections. For me as a trader I do not mind some corrections in an ETF as they always present opportunities to enter the market.

Lyxor MSCI Indonesia UCITS ETF

The MSCI Indonesia index consists of about 100 publicly traded companies. The financial sector has the largest weighing with 40% followed by consumer goods with a striking 30% share (which is a large share for an Asian country).

Industry and basic materials only represent a 5% share each which is relatively small. I myself am a big believer in the strength of Indonesia and I love to invest there but I prefer to enter the market after a correction and I will never take a long ride while I’m in.

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