ASEAN Inc.: One Portfolio, Seven Markets — and a...

ASEAN Inc. is a simple but powerful idea: treat Southeast Asia like a single, investable company. The portfolio is made up of seven U.S.-listed exchange-traded funds (ETFs) that track the stock markets of Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, and a regional ETF covering ASEAN’s 40 largest companies. As outlined in last week’s article (Week 5, 2026), the goal of this series is straightforward — to track how each country ETF performs over time and to assess how the region stacks up as a whole against global benchmarks.

To make the analysis concrete, Let’s assume we allocated US$1 million equally across the seven ETFs, or US$142,857 per market, on December 31, 2024. As of February 6, 2026, that portfolio generated a total return, including dividends, of +23.6%, equivalent to US$236,382 in gains. On an annualized basis, this translates to a 21.3% return. That comfortably outperformed the Vanguard S&P 500 Index Fund’s annualized return of 17.0% over the same period, though it lagged the much stronger 29.1% annualized return of the Vanguard Emerging Markets Index Fund. In other words, ASEAN Inc. delivered solid equity-like performance, beating U.S. large caps, but did not fully keep pace with the broader emerging market rally.

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Over the past year, from February 6, 2025, to February 6, 2026, ASEAN Inc. delivered a return of +22.9%, outperforming the S&P 500’s return of +15%.

Vietnam was the clear standout within the portfolio. The Global X MSCI Vietnam ETF posted a total return of +58.1%, reflecting a market that continues to attract long-term growth capital. Investor sentiment toward Vietnam is currently relatively neutral, suggesting expectations that corporate earnings will grow broadly in line with historical trends, which have averaged about +19% per year over the past three years. Valuations also appear reasonable: the market is trading close to its three-year average price-to-earnings (PE) ratio of 14.8x, indicating that much of the optimism is grounded in earnings growth rather than multiple expansion.

Singapore delivered another strong showing. The iShares MSCI Singapore ETF returned +35.5% over the period, supported by investor optimism around the city-state’s role as a regional financial hub and a gateway to Asian growth. Earnings are forecast to grow by approximately +7.6% annually over the next three years, a steady pace for a mature market. That optimism, however, has pushed valuations higher, with the market trading at a PE ratio of 16.6x compared with its three-year average of 14.3x. Investors appear willing to pay a premium for stability, dividends, and long-term growth visibility.

The Global X FTSE Southeast Asia ETF, which represents ASEAN’s top 40 companies, generated a total return of +27.7%. This performance sits comfortably between the region’s strongest and weakest markets and highlights the diversification benefits of owning regional champions rather than individual country exposures. The result reinforces the idea that ASEAN’s largest firms, many of which operate across borders, can smooth out country-specific volatility while still capturing regional growth.

Malaysia also delivered a respectable outcome. The iShares MSCI Malaysia ETF returned +24.4%, despite relatively muted earnings expectations. Investors are currently neutral on the Malaysian market, anticipating that earnings will broadly track recent history, which has actually seen a decline of about 5% per year over the past three years. Valuations reflect this caution, with the market trading close to its three-year average PE ratio of 17.9x. Performance here has been driven less by growth enthusiasm and more by stability and income.

Thailand’s equity market produced more modest gains. The iShares MSCI Thailand ETF returned +12.1%, as investors remain cautious amid slow earnings momentum. Market sentiment is neutral, with expectations that earnings will continue to grow — or contract — at roughly the same pace as recent history, which has seen earnings decline by about 3% per year over the past three years. The market’s valuation, at a PE ratio of 17.8x, is close to its three-year average, suggesting limited upside unless earnings trends improve.

The Philippines was one of the laggards in the portfolio. The iShares MSCI Philippines ETF returned just +8.9%, reflecting pessimistic investor sentiment. Investors appear to expect future earnings growth to fall short of the strong historical pace of roughly +9.1% per year seen over the past three years. This caution is visible in valuations: the market is trading at a PE ratio of 10.3x, below its three-year average of 11.9x. While this discount may appeal to value-oriented investors, it also signals concerns about near-term growth and execution.

Indonesia was the weakest performer, with the iShares MSCI Indonesia ETF posting a slight loss of -1.2%. Interestingly, this came despite optimistic investor sentiment about the country’s long-term growth potential. Earnings growth over the past three years has been essentially flat, at around -0.4% per year, yet the market is trading at a relatively high PE ratio of 22.5x, well above its three-year average of 20.1x. This gap suggests that expectations may already be stretched, leaving little margin for disappointment in the short term.

Taken together, ASEAN Inc.’s performance tells a nuanced story. Southeast Asia, as a region, has proven capable of delivering strong, competitive returns, particularly when anchored by faster-growing markets like Vietnam and supported by stable markets such as Singapore and Malaysia. At the same time, wide differences in earnings momentum, valuations, and investor sentiment across countries underline the importance of diversification. For investors, ASEAN Inc. is less about betting on a single market and more about owning a balanced exposure to one of the world’s most dynamic — and uneven — growth regions.

🌏 SeA (Southeast Asia) Focus Portfolio Performance Update

The International Investor manages the SeA (Southeast Asia) Focus Portfolio and publishes its investment performance for the informational and educational benefit of investors and readers.

From its inception on December 16, 2023, to January 30, 2026, the portfolio, which invests in the highest-quality and fastest-growing businesses in Southeast Asia at attractive prices, delivered an annualized return of +62.4%, outperforming all Southeast Asian country index funds.

Follow the portfolio here.

Financial data was provided by S&P Global Market Intelligence.

The best way to generate superior returns while protecting ourselves from economic and geopolitical uncertainty is to invest in high-quality, cash-generating businesses over the long term that deliver real value to the economies they serve.

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The International Investor manages a hedge fund for a select group of investors. The fund invests in the world’s highest-quality businesses with high and sustainable returns on capital at attractive prices and margins of safety relative to what they’re intrinsically worth. The fund maintains a focused portfolio, invests fundamentally and intelligently, and trades infrequently. The fund generates superior returns over time with minimum business risk, regardless of the global market environment.

The International Investor manages the SeA (Southeast Asia) Focus Portfolio for a select group of investors and publishes its investment performance for the informational and educational benefit of investors and readers.

The content is for informational purposes only and is neither an offer to buy or sell securities nor investment advice. Forward-looking statements may be uncertain, and historical returns may not predict future performance. The International Investor is not a registered broker-dealer, investment adviser, or fiduciary.

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