Asia is an exciting place for American investors. The continent is home to some of the world’s fastest-growing economies.
The problem is, Asia can also be a very complicated place for American investors.
It’s home to some of the most powerful exporters on Earth. Yet American investors can’t directly own these stocks because they don’t trade on U.S. exchanges.
Fortunately, there is a simple workaround...
This week’s chart looks at the year-to-date performance of the iShares Asia 50 (NYSE:AIA).
The fund owns shares of the most profitable firms from four Asian economic hubs - Hong Kong, Singapore, South Korea and Taiwan.
And as you can see, these companies are having a great year. The Asia 50 ETF is up nearly 20% year to date.
There’s a good chance this uptrend will continue through the end of the year - and beyond - for two reasons...
Trade rivalries and Christmas presents.
See, firms from these four regions often compete for space in America’s import market. As a result, currency devaluation in one country can lead to currency devaluation in others.
When a country’s currency loses value, governments clamor to protect their nation’s businesses. They don’t want another region to have the pricing advantage, so they devalue their currency to stay competitive.
This is happening in the wake of the South Korean won’s recent tumble. Japan is now considering a yen devaluation. And since Taiwan has no real diplomatic relations with the U.S., there’s not much Washington can do to stop them from joining in, too.
The end result? Cheaper Asian exports and higher sales volume... just in time for holiday season in the West.
It should be a boon for companies in the Asia 50 ETF.
With Black Friday and Cyber Monday coming up, they are poised to surge.