[ASEAN Inc.] +17.4% Annualized Since December 31, 2024 — Vietnam and Singapore Lead While Indonesia and the Philippines Lag

Key Takeaways

• ASEAN Inc. portfolio returned +17.4% annualized through May 2026
• Vietnam ETF led with +51.3% annualized, earnings growth slowing
• Singapore healthcare projected 110% earnings growth over three years
• Malaysia and Thailand spot material and tech earnings upside
• Indonesia, Philippines lag but earnings forecasts improve, hinting upside

Pulse Analysis

Southeast Asia’s macro backdrop remains compelling: younger workforces, manufacturing relocation from China, and rising domestic consumption have turned the region into a growth engine for global investors. Yet the recent ASEAN Inc. performance data shows that treating the bloc as a monolith can mask stark disparities. While the portfolio’s 17.4% annualized return trails the S&P 500’s 17.9% and lags the emerging‑markets index’s 25.5%, the underlying country ETFs tell a story of divergent trajectories driven by local policy, sectoral shifts, and earnings expectations.

Vietnam’s meteoric 51.3% annualized gain reflects its rapid post‑pandemic rebound, but analysts now see earnings growth slowing to 15% a year, prompting a pivot from real‑estate to utilities where firms like Phai Lai Thermal Power could post 52% earnings expansion. Singapore, a mature market, is quietly nurturing high‑growth pockets—healthcare giants such as Thomson Medical are forecast to grow earnings over 110% in three years, while materials anticipate a modest 5.5% earnings rise. Meanwhile, Malaysia and Thailand are entering a cyclical upswing, with materials and tech sectors projected to deliver 30%‑plus earnings growth, offering investors fresh alpha sources beyond the region’s traditional heavyweights.

For portfolio construction, the key takeaway is forward‑looking earnings momentum, not past price performance. Indonesia and the Philippines, the two laggards with negative returns, are seeing analyst upgrades—energy in Indonesia and materials in the Philippines could translate into outsized upside if earnings acceleration materializes. Investors should therefore blend country‑specific ETFs with sector‑focused allocations, maintain a diversified exposure to high‑growth utilities, healthcare, and materials, and stay vigilant to earnings revisions. This nuanced approach can capture the shifting currents of ASEAN markets while mitigating the risk of chasing broad‑brush momentum.