VanEck Indonesia Index ETF (IDX)

ETF VanEck Indonesia Index ETF (IDX) Summary

Profile:

• Focus: Provides exposure to a diversified portfolio of Indonesian equities.
• Asset Allocation: Primarily invests in large-cap Indonesian stocks, with minimal exposure to mid and small-cap stocks.
• Investment Strategy: Tracks the MCSI Indonesia Investable Market Excluded Foreign Companies Index, offering broad market exposure.

Objective:

• Aims to replicate the performance of the Indonesian stock market, offering investors capital appreciation and exposure to the Indonesian economy's growth.

Issuer: VanEck

• Reputation and Reliability: VanEck is a reputable asset manager with over 35 years of experience and a strong track record in emerging markets investing.
• Management: The fund is managed by experienced portfolio managers with expertise in Indonesian equities.

Market Share: IDX is one of the leading Indonesia-focused ETFs, with a market share of approximately 18.5% as of November 2023.

Total Net Assets: Approximately USD 1.3 billion as of November 2023.

Moat:

• Liquidity: IDX has a relatively high average trading volume, ensuring easy buying and selling.
• Cost Efficiency: The expense ratio of 0.59% is relatively low compared to other Indonesia-focused ETFs.

Financial Performance:

• Historical Performance: IDX has delivered strong returns over the past 5 years, outperforming the broader Indonesian stock market.
• Benchmark Comparison: IDX has consistently outperformed its benchmark index, demonstrating its effective tracking strategy.

Growth Trajectory:

• Economic Growth: Indonesia is a large and growing economy with a young population, presenting opportunities for long-term growth.
• Market Potential: The Indonesian stock market is still relatively small but has the potential to grow significantly.

Liquidity:

• Average Trading Volume: Approximately 250,000 shares traded per day.
• Bid-Ask Spread: Relatively tight, indicating efficient trading.

Market Dynamics:

• Economic Indicators: Indonesian economic indicators, such as GDP growth and inflation, can significantly impact the ETF's performance.
• Sector Growth: The performance of key sectors in the Indonesian economy, such as financials, energy, and consumer staples, can influence the ETF's returns.
• Global Market Conditions: Global economic and geopolitical events can also affect the Indonesian stock market.

Competitors:

• Ishares MSCI Indonesia ETF (EIDO) - 17.2% market share
• Xtrackers FTSE Indonesia UCITS ETF (IDXE) - 13.8% market share

Expense Ratio: 0.59%

Investment Approach and Strategy:

• Strategy: Tracks the MCSI Indonesia Investable Market Excluded Foreign Companies Index.
• Composition: Primarily invests in large-cap Indonesian stocks across various sectors.

Key Points:

• Provides diversified exposure to the Indonesian stock market.
• Offers strong historical performance and benchmark outperformance.
• Benefits from Indonesia's growing economy and market potential.
• Relatively low expense ratio and high liquidity.

Risks:

• Volatility: Indonesian stock market can be volatile, leading to significant price fluctuations.
• Market Risk: The ETF's performance is directly tied to the performance of the Indonesian stock market, which can be impacted by various economic and political factors.
• Currency Risk: The ETF is exposed to currency fluctuations between the Indonesian Rupiah and the US Dollar.

Who Should Consider Investing:

• Investors seeking exposure to the Indonesian stock market and looking for capital appreciation.
• Investors with a long-term investment horizon and tolerance for market volatility.
• Investors seeking diversification in their emerging market portfolio.

Evaluation of ETF VanEck Indonesia Index ETF's Fundamentals using an AI-based rating system on a scale of 1 to 10:

Fundamental Rating Based on AI: 8.5

IDX scores high on the AI-based rating system due to its strong historical performance, low expense ratio, high liquidity, and exposure to a rapidly growing economy. However, investors should consider the risks associated with market volatility and currency fluctuations before investing.

Resources and Disclaimers:

• VanEck website: https://www.vaneck.com/us/en/etfs/equity/idx/overview
• Morningstar: https://www.morningstar.com/etfs/arcx/idx/quote.html
• Bloomberg: https://www.bloomberg.com/quote/IDX:IND

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.