- EWS is a relatively popular fund used to express a single-country view on Singapore.
- Singaporean equities have underperformed historically. While the current valuation looks appealing, the opportunity is not exciting.
- EWS's major holdings are heavily exposed to the Asia-Pacific Financials sector (the two largest stocks in the portfolio are banks).
- Therefore, while Singaporean equities are not currently "expensive" (as compared to U.S. equities), EWS is not likely to attract significant upside considering that China is already ahead in its business cycle.
- A further reining in of lending in the region could soften medium-term performance of Asia-Pacific Financials, and as such, I would probably rather own U.S. Financials than Singapore Financials all considered.
For further details see:
EWS: Singaporean Equities Offer Diversification Value, But Upside Potential Is Moderate