Southeast Asia Market Insights: What's Cooking for the Next Three Years?
April 25, 2025 Edition
Welcome to your backstage pass into the minds of investors betting on Southeast Asia. This report serves up a flavorful blend of current sentiment, future growth forecasts, dividend yields, and what kind of returns you can realistically chew on over the next several years. Spoiler alert: It’s not all sunshine — but there’s plenty to feast on if you pick your plates carefully.
The Setup: A Rough Start, But Holding Up
Since its start on December 31, 2024, The International Investor’s Southeast Asia Index — made up of seven U.S.-traded ETFs, or exchange-traded funds, covering Southeast Asian markets — has lost a modest 1.5% as of April 25, 2025. In US dollar terms, that’s a dip of $148, leaving the portfolio temporarily simmering at $9,852 down from the original $10,000.
But here’s the silver lining: the Index handily outperformed the broader U.S. stock market’s painful -7.9% plunge over the same period. Even better, it has staged an impressive comeback: from a bruising -14.3% low on April 8 as a result of Trump’s “Liberation Day” tariffs, it’s clawed its way back.
Performance by Country: A Buffet of Winners and Losers
In the first few months, results across the region have been a mixed bag:
Singapore: +9.8% — the star of the show
Philippines: +4.9% — holding its own nicely
Vietnam: +1.8% — a slow simmer upward
ASEAN’s Top 40 Companies: -1.0% — essentially flat
Malaysia: -4.5% — slightly burned
Indonesia: -9.3% — slipping on the sauce
Thailand: -12.1% — the kitchen’s current hot mess
Buffett’s Favorite Recipe: Focus on Business Performance
Warren Buffett would tell us: Forget short-term price noise. Look at how the businesses are actually cooking!
Fortunately, the future looks quite tasty.
Analyst forecasts peg the Index’s average annual earnings growth at +12.6% over the next three years. Here’s the forecasted earnings growth breakdown by country:
Indonesia: +22.2% (slightly lower from last week’s +22.3%)
Thailand: +12.5% (down from +12.8%)
Vietnam: +12.3% (down from +12.4%)
Philippines: +10.8% (down from +11.0%)
Singapore: +9.9% (down from +10.1%)
Malaysia: +8.1% (up from +8.0%)
The recent downticks? Blame it again on Trump’s “Liberation Day” tariffs, which are giving markets a mild case of indigestion.
Dividend Yields: The Gravy on Top
The current dividend yield-on-cost for the Index is a juicy 3.3%, offering a steady stream of cash flow even if price returns wobble.
By country:
Indonesia: 5.2%
Singapore: 4.3%
Malaysia: 3.3%
Thailand: 3.2%
Philippines: 2.3%
Vietnam: 1.0%
Putting It All Together: Your Expected Returns
Combining earnings growth and dividend yield-on-cost, the expected annual returns for each country ETF over the next three years stack up as follows:
Indonesia: +27.4% — the heavyweight champion
Thailand: +15.7% — a comeback contender
Singapore: +14.2% — the reliable old chef
Vietnam: +13.3% — the ambitious apprentice
Philippines: +13.1% — the sturdy sidekick
Malaysia: +11.4% — the slow but steady steamer
For the entire Index, you’re looking at a delicious expected return of around +15.9% per year — not bad at all, especially considering today’s lukewarm global outlook.
Here’s a table summarizing the expected annual returns (earnings growth + dividend yield-on-cost) for each country ETF:
Final Bite
Short-term turbulence aside, Southeast Asia remains a land of opportunity for those with patience and an appetite for growth. With double-digit earnings expansion, steady dividends, and a modest price dip offering a better entry point, the region’s investment table looks inviting — just be ready for a few spicy surprises along the way.