Indonesia ETF: Another BRIC in the Wall?

One of the top single-country exchange traded funds (ETFs) year-to-date is the Market Vectors Indonesia (IDX), up 9.4%. This country is certainly worth keeping an eye on as one of the most exciting and promising in Asia, a fast-growing continent lousy with investment opportunities.

Why?

• Influential global asset manager Templeton Asset Management said that Indonesia could be ready to become a member of the BRIC (Brazil, Russia, India, China) group of major emerging countries. Templeton points to Indonesia’s fast-growing stock markets, the second-best performing stock market of last year, as a key indicator.
• Indonesia recently had its sovereign debt upgraded to one level below investment grade  by Fitch Ratings firm.  Fitch’s revised rating of Indonesia to BB+ is one higher than the Ba2 rating set by Moody’s and two levels higher than Standard & Poor’s BB-. The ratings boost is a nod to how well Indonesia weathered the global economic meltdown.
• Indonesia's central bank boosted its growth forecast for this year to between 5.5% and 6%. Next year could be even better, with growth between 6% and 6.5%.
• Indonesia doesn't rely as much on exports as its neighbors do, and consumer confidence is at a high, thanks to a more stable political climate.
• The country's lenders are targeting an average loan growth of 24%, thanks to growing optimism about the country's economy. The central bank had forecast growth of 17% to 20%.

Indonesia remains, of course, an emerging market and its government still struggles with corruption. With that in mind, you can mitigate risk with a strategy that incorporates a stop loss when the going gets rough. Right now, Market Vectors Indonesia (NYSE: IDX) is above its long-term trend line (the 200-day moving average).