Top ETF picks for the next decade.

The last ten years have seen the Asian financial crisis, the rise and fall of the dot-coms, the real estate boom and bust, the Iraq War, and the present credit crunch. I feel that the next ten will be no different with assorted manias, depressions, bubbles and wars occurring just like they have always done before. I see no reason why the next decade will be any better or worse than the last. Here are some ETFs that I feel will do well as suggested by their back tested performance over the last decade.

My top pick for all low risk investors is the DPN ETF . Its Index and back tested performance is described here . Historical data suggests that the consumer staples sector offers good returns with low volatility.

My pick for the next decade for those who do not care about volatility is is the DGS ETF . Its Index and back tested performance is described here . If you are not worried by an occasional 50% fall in value then dividend paying emerging market small cap stocks offer the highest rewards. Even after suffering an initial 50% drop in the Asian financial crisis this index has returned 20% annualized since 1998. Emerging markets

All the index links above show back tested results for the last decade so you can get an idea of the expected volatility and possible returns.

As you can see I like Fundamental Indexing, I own other ETFs from WisdomTree which creates these ETFs. The particular ETFs above were not available when I was last able to invest so I have ended up with some other stuff (DEM and DFE).

ETFs are funds but may be bought on the stock exchange like any other stock. there is no entry or exit load but there is brokerage. The underlying fund usually has a low annual expense ratio, usually .6% to 0.7% for the Wisdomtree ETFs.

Singapore, Taiwan and Korea msci index comparisions

MSCI Korea: 10Yr returns: 13.09, P/E=15.88, P/B=2.26 Semiconductors=19.78% of Index
MSCI Taiwan: 10Yr returns: -1.58, P/E=20.17,/ P/B=3.24, Semiconductors =24% of index
MSCI Singapore: 10Yr returns: 2.83, P/E=19.9, P/B=2.83, Banks=35.17% of index

Based on a simplistic analysis of the above I would say that Korea is the best buy. Buffet seems to agree and has picked up some shares in the steel major POSCO which is 7.6% of the Korean index.

In Singapore you can buy the Lyxor Korea ETF , in the us you can buy EWY.

Disclaimer: I already own the Lyxor Korea ETF and am invested in a Singapore Index.
I am not sure if the numbers above include reinvested dividends. The P/E also seems to be different from other estimates I have seen, possibly because they may be using only annual figures and not TTM and also because the more bullish analysts usually mention forward P/E instead of trailing P/E.