Tuk-Tuk to the Future: Riding Southeast Asia's Growth Express
May 16, 2025 Edition
Executive Summary
Southeast Asia may not be the first place that comes to mind when thinking of global equity outperformance, but investors riding The International Investor’s Southeast Asia Index are off to a fast start. From its launch on December 31, 2024, to May 16, 2025, this basket of seven U.S.-listed Southeast Asian ETFs, or exchange-traded funds, has quietly climbed +4.7%, adding US$466 in value and bringing the portfolio up to US$10,466 — not bad for just over four months, especially compared to the overall U.S. market’s -0.3% dip over the same period.
But before we break out the confetti, it’s worth zooming out: short-term performance is often driven more by sentiment than fundamentals. As the Oracle of Omaha himself reminds us, it’s earnings that ultimately steer the market’s long-term path. So how does investor enthusiasm stack up against analysts’ expectations for these markets? Let’s take a closer look at the numbers — and the narrative.
Chapter 1: Sentiment Check — Winners, Laggards, and the Surprisingly Strong
Let’s start with the scoreboard.
Since New Year’s Eve 2024, the returns across Southeast Asia have been a colorful mix of gains, stumbles, and faceplants:
Singapore: +17.5% – The Lion City roared, leading the pack.
Philippines: +10.6% – The archipelago’s resilience shines through.
Vietnam: +7.2% – A steady climb from the region’s upstart.
ASEAN Top 40: +5.2% – A blended bet on big names delivered modest gains.
Malaysia: +1.4% – Flatlining but at least still in the green.
Indonesia: -0.5% – An unexpected dip for a high-growth story.
Thailand: -8.8% – The index’s underperformer, dragged by economic uncertainty.
Clearly, the market’s mood has been mixed. Investors loved Singapore and the Philippines, but gave Indonesia and Thailand the cold shoulder — despite what their earnings forecasts are telling us (spoiler: those might surprise you).
Chapter 2: The Earnings Engine — Why This Ride is Just Beginning
Buffett reminds us: “Over the long term, the stock market is a weighing machine.” And what it weighs, ultimately, is earnings.
The forecasted average annual earnings growth for the entire index over the next three years is a robust +13.3%. Layer on a solid dividend yield-on-cost of 3.3%, and you’ve got a forecasted annual return of 16.6% for the full index. Not bad for a region many investors overlook.
Here’s how each country stacks up in terms of expected returns (earnings growth + dividend yield):
Indonesia: 24.6% + 5.2% = 29.8%
Thailand: 12.6% + 3.2% = 15.8%
Vietnam: 14.2% + 1.0% = 15.2%
Singapore: 9.5% + 4.3% = 13.8%
Philippines: 10.8% + 2.3% = 13.1%
Malaysia: 8.0% + 3.3% = 11.3%
Notice anything? Investors have been cheering Singapore’s current performance, yet Indonesia, despite its recent slump, boasts the highest expected return by far — thanks to blazing earnings growth and a juicy dividend.
Chapter 3: A Region on the Verge — What Comes Next
This isn’t just a short-term trade. Southeast Asia is in the early innings of a transformation fueled by demographics, digitization, regional integration, and shifting global supply chains.
Investors may be reacting emotionally in the short term — boosting Singapore and fleeing Thailand — but the fundamentals point to broad-based growth across the region. If earnings deliver as expected, this index is poised to be more than just a nice diversifier. It could be a stealth growth engine in global portfolios.
Closing Thoughts: Don’t Miss the Bus (or Tuk-Tuk)
Markets are messy, noisy, and often driven by headlines. But when you step back and follow the numbers, Southeast Asia’s story is compelling — and underappreciated.
The International Investor’s Southeast Asia Index is your passport to that story. With strong earnings momentum, decent dividends, and valuations that haven’t yet gone parabolic, the region offers a rare trifecta: growth, income, and mispricing.
Consider this your boarding call.