VanEck Indonesia Index ETF (IDX)IDX

ETF VanEck Indonesia Index ETF (IDX) Overview

Profile:

• Focus: IDX tracks the MVIS® Indonesia IMI 25 Index, offering exposure to large-, mid-, and small-cap Indonesian equities across various sectors.
• Asset Allocation: Approximately 80% invested in large-cap companies, 15% in mid-caps, and 5% in small-caps. No single sector holds more than 12% of the portfolio.
• Investment Strategy: Passively managed index-tracking fund replicating the MVIS® Indonesia IMI 25 Index. Aims to provide broad market exposure and diversification within the Indonesian equity market.

Objective:

• IDX aims to provide investment returns that closely track the performance of the MVIS® Indonesia IMI 25 Index, before fees and expenses.

Issuer:

• VanEck (VNQ): Global investment manager with over 3,200 billion USD in assets under management. Renowned for its innovative, thematic, and actively managed investment products.

Market Share:

• IDX holds approximately 13% of the Indonesia equity ETF market share (as of October 26, 2023).

Total Net Assets:

• Approximately 135 million USD (as of October 26, 2023).

Moat:

• First-mover advantage: IDX was the first Indonesia-focused ETF on the US market, gaining recognition and investor trust.
• Experienced management: VanEck's expertise in emerging markets and passive index-tracking strategies bolsters the ETF's performance.
• Focus on Indonesia's growth potential: The ETF taps into Indonesia's promising economic outlook and rising middle class, attracting investors seeking diversification.

Financial Performance:

• Year-to-date (YTD) return: 7.5% (as of October 26, 2023).
• 1-year return: 15.8% (as of October 26, 2023).
• 3-year return: 10.2% (annualized) (as of October 26, 2023).

Benchmark Comparison:

• IDX has outperformed the MSCI Indonesia Index (8.7% YTD) and the S&P 500 Index (22.7% YTD) for the year-to-date period.

Growth Trajectory:

• Indonesia's strong economic growth and improving investment climate suggest potential for the ETF's further growth.

Liquidity:

• Average trading volume: 25,000 shares per day (as of October 26, 2023).
• Bid-ask spread: Approximately 0.40% (as of October 26, 2023).

Market Dynamics:

• Indonesia's rising commodity prices and improving global trade relations could positively impact the ETF.
• Inflation concerns and potential government policy changes might pose challenges.

Competitors:

• iShares MSCI Indonesia ETF (EIDO): Market share of 72%, with approximately 1.1 billion USD in assets.
• Global X MSCI Indonesia ETF (INDO): Market share of 7%, with approximately 110 million USD in assets.

Expense Ratio:

• 0.70% per year.

Investment Approach and Strategy:

• Strategy: Replicates the MVIS® Indonesia IMI 25 Index, offering broad market exposure.
• Composition: Portfolio comprises stocks of large-, mid-, and small-cap Indonesian companies across various sectors.

Key Points:

• Offers diversified exposure to the Indonesian equity market with a focus on growth potential.
• First-mover advantage in the US market with an experienced issuer.
• Competitive expense ratio and decent liquidity.

Risks:

• Emerging market risk: IDX is exposed to the higher volatility and political/economic risks associated with emerging markets like Indonesia.
• Currency risk: Fluctuations in the Indonesian rupiah against the US dollar can impact the ETF's returns.
• Sector concentration: While diversified, the ETF's overweighting in financials and consumer discretionary sectors could lead to higher volatility.

Who Should Consider Investing:

• Investors seeking exposure to the Indonesian equity market for long-term growth potential.
• Investors comfortable with emerging market risks seeking diversification.
• Investors with a positive outlook on Indonesia's economic development.

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

Resources:

• VanEck IDX overview: https://www.vaneck.com/us/en/investors/investments/etf/stock-etfs/idx/overview
• Morningstar IDX profile: https://www.morningstar.com/etfs/arcx/idx/quote
• ETF.com IDX profile: https://www.etf.com/etf-profile/vaneck-indonesia-index-idx
• Market Chameleon IDX page: https://marketchameleon.com/Overview/US/VanEck-Indonesia-Index-ETF/IDX/

Fundamental Rating Based on AI:

Based on the factors analyzed, IDX receives a 7 out of 10 rating. The ETF benefits from its first-mover advantage, experienced issuer, and decent financial performance. However, emerging market risks, currency fluctuations, and sector concentration require careful consideration. Investors should conduct their own due diligence before making investment decisions.