Ozzy Ozzy Ozzy Oi Oi Oi

You remember the cheer for the Australian athletes from the Sydney Olympics.  There are certainly some cheers going up for the Australian stock market.  Not only is the Australian stock market turning in solid performance take a look at the currency. Oh did I mention that the Australian economy is the only advanced economy to avoid recession in 2009.  Wow!  That is a major accomplishment.  Don’t get me wrong it is not all roses in Australia’s economy.  They have stimulus packages, employment issues and falling imports. But…

The Goods

Besides being a stunning beautiful country Australia is loaded with natural resources and is geographically well situated.  Australia is one of the worlds leading exporters of coal, iron ore, meat, gold, wool and more.  Major trading partners include Japan, China, South Korea, US, New Zealand, and India.  What you may notice from the line up of major trading partners is that Australia is mighty close to China and India and South Korea all of which are fast growing economies with loads of promise.  Being rich in hard and soft commodities have been a boon for the Australian dollar as commodities have enjoyed significant strength in recent years and is expected to continue.

ETF Plays

A direct play on Australia would be the iShares Australia (ticker EWA).  EWA is up 45.81% ytd and is well above both its 50 and 200 day EMA.  The fund’s single biggest holding is BHP Billiton at 15.5% of the portfolio.  The largest sector in the fund is financial companies at 41.5% of the portfolio.  Keep in mind that the financial companies in Australia are in an enviable position so close to the fastest growing economies in the world.  It is no coincidence that ANZ Bank of Australia was given permission to open a wholly owned subsidiary in Hanoi, Vietnam a very fast growing economy.

Charts courtesy of StockCharts.com

For significant Australia exposure and more look at iShares MSCi Pacific ex-Japan (ticker EPP).  With EPP you are getting a fund with approx. 65% in Australia, 21% in Hong Kong, and 11% in Singapore.  Here again your top holding is BHP Billiton and financial companies are the biggest sector at approx. 45%.   EPP is up 43.87% ytd and is well above its 50 and 200 day moving average.

Full Disclosure Statement: ETFGPS is a blog that Navigates The World of ETFs. Sustainable Investment Strategies LLC is a Registered Investment Adviser in the State of Maryland, and does hold positions in the EPP ETF at the time of writing. Investors who are interested in money management services may visit the Sustainable Investment Strategies LLC web site.

Tagged as: Australia, Commodities, EPP, EWA