Three ETFs For Account Surplus Countries

In an environment of slumping emerging markets equities, plunging currencies and vulnerable sovereign credit ratings, the current account surplus has become one of the most prized economic traits a country can possess. The combination of tumbling currencies and widening current account deficits explain the deep slumps recently experienced by ETFs tracking emerging markets such as India and Indonesia. Those widening deficits also explain why global investors are pulling cash from those countries and why both are vulnerable to

. Fortunately for investors, there are a few countries in both the developed and emerging worlds that sport current account surpluses and these nations are easily accessible via ETFs. Consider the following funds.

When it comes to Southeast Asia ETFs these days, it is hard to see the forest through the trees. Given the substantial long-term potential offered by Philippine equities, EPHE

while the trees dragging this ETF down are the likes of Indonesia, Malaysia and Thailand. The simple fact is that on top of all of the

to invest in the Philippines is that the country has a current account surplus. The Philippines is often compared to Indonesia, a country with a WIDENING deficit. EPHE has been slammed on fears the Federal Reserve will taper its quantitative easing program, which has led to a weaker peso. That situation is overstated and/or misunderstood because the Philippines is on the receiving end of billions in dollar-denominated foreign remittances and the country does not need to service a massive amount of dollar-denominated debt. Related:

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Or the iShares MSCI Poland Capped ETF

. Either way, investors gain exposure to Poland, a country that has proven to be one of the most durable emerging markets. While EPOL and PLND

to Fed tapering, the two ETFs have gained about 2.7 percent in the past month. Poland's most recently posted current surplus was something of a surprise, but a positive one at that. What should not be a surprise is the catalyst that can buoy further gains for EPOL and PLND. That being an ongoing economic recovery in the Eurozone. Simple geography dictates that investors looking for emerging markets plays on the Eurozone recovery should consider EPOL and PLND.

Vietnam, classified as a frontier market, has been hammered by Fed tapering fears and slowing Chinese economic growth, factors that have weighed on a plethora of emerging markets ETFs. Vietnam also has its own problems to deal with, namely its plans to

from its fragile banking system. Long story short, VNM has plunged nearly 20 percent in the past 90 days. However, foreign remittances to the country are rising, currency reserves are surging and it is estimated the

. VNM had a P/E of 11.87 and a price-to-book ratio of 1.29 at the end of July,

. That makes Vietnamese equities cheaper than their Brazilian, Indian and Indonesian counterparts, just to name a few. For more on ETFs, click

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