This Indonesian ETF Has A High Yield But Has Notable Risks
The iShares MSCI Indonesia ETF (NYSEARCA:EIDO) gives U.S.
EIDO's Dividend Dropped 27% in 2025, Signaling Deeper Trouble Ahead
iShares MSCI Indonesia ETF (NYSEARCA:EIDO) pays dividends twice a year, and the headline yield draws investors seeking emerging market income.
EIDO: Hasn't Been Flourishing, But There's Potential For A Change
The iShares MSCI Indonesia ETF has only gained 2% this year and has grossly underperformed global and EM peers. Indonesian banks, comprising over 40% of EIDO, have faced sluggish loan growth, although stable NIMs in a dovish monetary setting reflect well. Recent government stimulus to the tune of $1B could lift Q4 GDP and 2026 prospects, while further rate cuts are expected from this month through Q1-26.
Indonesia Offers Value, But EIDO May Not Be The Best Vehicle
Indonesian equities appear attractively valued after a decade of underperformance in USD terms. The iShares MSCI Indonesia ETF (EIDO) offers convenient access but is highly concentrated and holds several richly valued or unprofitable names. Top holdings show a mix of strong historical growth and low P/E ratios, but the ETF includes triple-digit P/E and cash-burning companies.
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EIDO: This Indonesian ETF Is A Very Poor Choice For Long-Term Oriented Investors
EIDO provides easy access to Indonesian equities, but is a poor proxy for the broader economy and its growth potential. The ETF is heavily concentrated in a few big names in slow-growth sectors, limiting upside and increasing risk. While Indonesia's economy has strengths, EIDO's sector composition doesn't capture the country's most dynamic opportunities.
EIDO: Indonesia Poised To Bounce Back
Southeast Asian markets, particularly Indonesia, have struggled, but EIDO is a "BUY" due to a weakening dollar, falling valuations, and potential growth bottoming. EIDO's expense ratio is lower than IDX, and it offers a purer play on Indonesian equities, with financials making up nearly half its holdings. Global trade tensions and a declining US dollar could benefit emerging markets like Indonesia, making it well-placed for short- to medium-term gains.
EIDO: Reasonable Earnings Yield A Good Underlying Growth For A Maturing Economy
The iShares MSCI Indonesia ETF offers a 10% earnings yield and reasonably low expense ratios considering that it's quite an exotic exposure. The BI is prioritising protecting the rupiah by holding up rates, which is a great set up for financials which dominate the ETF. Net interest margins and loans growth rise for the largest financial holdings.
EIDO: Indonesia Well-Positioned For 2025 Recovery
EIDO: Indonesia Well-Positioned For 2025 Recovery
EIDO: Positive Economic Prospects To Support Equity Market Sentiment
Indonesia's economy has a bright outlook ahead of it in 2024. The country's Central Bank will likely be able to cut interest rates soon. The equity markets appear attractively priced, considering the favorable growth prospects.
EIDO: High Concentration In Two Stocks
iShares MSCI Indonesia ETF provides access to Indonesian equities, which have strong economic growth and foreign investment. The EIDO ETF is highly concentrated in the top 2 stocks, but offers exposure to Indonesia's booming economy. Consider blending EIDO with VanEck Indonesia Index ETF for a diversified portfolio of Indonesian equities.
