Unemployment has been drifting higher for some of the major
developed and emerging economies. U.S. and European nations have
seen unemployment levels rise dramatically in the recent past.
This has been a major cause of a slow recovery in the U.S. market
and a double-dip recession in Europe. (
Three Forgotten Ways to Play Europe with ETFs
According to a recent report from the Labor Department, U.S.
unemployment rate dropped to 7.7% in November from 7.9% reported
in October,for the first time in four years. This indicated
slight recovery in the job market.
However, it should be noted that the decline in the
unemployment rate is not really attributed to the creation of new
jobs but rather to a decline in the labor force. The biggest job
addition was seen in the retail sector because of the extra work
force during the holiday season.
Euro-zone unemployment level came in at a historical high of
11.7% with Spain and Greece reporting the highest unemployment
rates in the zone. The unemployment rate in Spain came in
at 26.2% while Greece recorded a rate of 25.4% (
Spanish Bailout: Did It Help European ETFs?
). Austria and Luxembourg reported the lowest unemployment rates
in the region at 4.3% and 5.1%, respectively in November.
In this environment of rising unemployment, investors may opt
to shift their asset base to countries which have a healthier
labor market. The nations with a strong labor force remained
largely unaffected by the turbulence in the U.S. and European
Forget European Woes with These Three Country
In this article we have highlighted five economies which have
a healthy level of employment, thereby indicating the possibility
of a strong economic performance in future.
Vietnam posted an unemployment rate of 2.29%, among the lowest
in the world. However, the rate rose slightly from 2.22% as many
manufacturers had to defer some manufacturing operations due to
weak demand, resulting from global slowdown. However, Vietnam
expects its unemployment rate to decrease in fiscal 2013. In the
recently released Global Economic Outlook Report, the
International Monetary Fund (IMF) projected Vietnam's GDP growth
at 5.9% 2013. By 2017, GDP growth is forecast at 7.5%. Weakening
global consumption demand may however put some pressure on the
Investors seeking to tap this economy in basket form may look
to invest in
Market Vectors Vietnam ETF (
Can the Vietnam ETF Continue Its Run?
). VNM tracks the Market Vectors Vietnam Index, which provides
exposure to the publicly listed companies that are domiciled and
listed in Vietnam or derive at least 50% of their revenues from
The fund provides exposure to 33 Vietnamese securities and
manages an asset base of $260.2 million. The fund charges a fee
of 76 basis points. Last year, the performance of the fund
suffered from a very high level of inflation in the country and
waning domestic and global demand. But now with the inflation
level much under control and the government implementing measures
to stimulate domestic demand, the fund delivered a year-to-date
return of 8.81%.
Thailand has a rock bottom unemployment rate of 0.63%. Last
year's flood in Thailand hit manufacturing activities in the
region leading to shutdown and suspension of operations by many
manufacturers. However, the government efforts to fuel domestic
demand resulted in a quick recovery (
Can Anything Stop These Southeast Asia ETFs?
In the third quarter of fiscal 2012, the economy beat
expectations on the back of solid domestic demand and healthy
investment which helped in offsetting the lower demand from
global sources. The economy remains resilient to the weak U.S.
economy, slow growth in China and the European crisis.
IMF expects the economy to post growth of 7.5% in 2013.
Investors seeking for a pure play in the economy can look to
MSCI Thailand Investable Market Index Fund (
). THD is home to 92 securities of Thailand which are mostly
large caps. In this basket of securities, the fund invests an
asset base of $697.9 million. The fund charges a fee of 59 basis
The unemployment rate in Switzerland is at 3.1%. In an
environment of aggravating unemployment and deep recession in the
Euro-zone, Switzerland remains an intriguing choice for investors
The country has a budget surplus and a credit rating of 'AAA'.
Though the Swiss National Bank (SNB) intervenes to maintain the
currency peg at 1.20 against the euro; withrising turbulence in
the European market, it has become extremely difficult for SNB to
maintain the peg. If the peg is removed it may lead to the
currency gaining not only against the dollar but against the euro
as well and may pose a threat to the Swiss economy.
Investors who are positive on the long-term prospects of the
country can invest in
iShares MSCI Switzerland Index Fund (
. Through EWL an investor can tap the Swiss economy through 40
large cap securities of the region. In this basket, the fund
invests $699.5 million while charging an expense ratio of 52
basis points from the investor (
ETFs for the Most Competitive Countries on
South Korea sees its unemployment level at 2.8%. Despite being
one of the emerging markets, South Korea has been resilient to a
weak U.S. economy and the European woes. The buoyancy of
the economy can be attributed to the strength of three world
beating Korean companies, namely, Samsung, Hyundai Motor Co. and
its affiliate Kia Motors Corp (
South Korea ETF Investing 101
According to the Korean brokerage houses, the South Korean
economy is expected to grow at the rate of 3.2% in 2013. The
country still has plenty of room to grow going by its gross
national income per capita of $20,870 last year, compared with
Japan's $45,180 and Hong Kong's $35,160, according to World Bank
As the economy is highly dependent on exports, it was somewhat
hurt by the weak demand from U.S. and Europe. But strong domestic
demand helped offset the weakening global demand.
For a broad exposure to the South Korean economy, investors
can have their asset invested in
iShares MSCI South Korea Index Fund (
. In a holding of 107 securities which are mostly large caps, the
fund invests an asset base of $3 billion and charges a fee of 59
Singapore has an unemployment rate at just 1.9%. An affluent
economy, Singapore offers investors an option worth the
investment when growth of the world's largest economies has taken
a toll. (
Singapore ETFs for the Rise of Asian Financial
Attributable to declining exports to Europe, Asia and U.S.,
many countries have suffered low growth with Singapore not being
an exception. Also, the Singapore currency has been rising which
makes its exports more expensive. IMF estimates the economy to
grow at 2.1% for 2013.
Investors can tap this economy through
iShares MSCI Singapore Index Fund (
. EWS has amassed over $1.6 billion and trades a robust 1.9
million shares a day while charging investors 52 basis points a
year in fees for its services. The fund provides exposure to 32
Want the latest recommendations from Zacks Investment
Research? Today, you can download
7 Best Stocks for the Next 30 Days
Click to get this free report >>
ISHARS-SWITZERL (EWL): ETF Research Reports
ISHARS-SINGAPOR (EWS): ETF Research Reports
ISHARS-S KOREA (EWY): ETF Research Reports
ISHRS-MSCI THAI (THD): ETF Research Reports
MKT VEC-VIETNAM (VNM): ETF Research Reports
To read this article on Zacks.com click here.
Want the latest recommendations from Zacks
Investment Research? Today, you can download 7 Best Stocks for
the Next 30 Days. Click to get this free report