The Indonesian equity market ranked as one of the best-performing markets in the world through the first half of 2010. Van Eck's Market Vectors Indonesia ETF (IDX), a fund designed to track the Indonesian stock market, jumped 13.55% during the first six months of 2010.

The Indonesian market is advancing further so far in the second half of the year. As a result, IDX certainly has my attention. The ETF is intended to replicate, before fees and expenses, the price and yield performance of the Market Vectors Indonesia Index. The fund offers an easy way for you to ride the upward climb of the Indonesian market.

In case you have doubts that faraway Indonesia is a place that you may want to invest, consider the following. Indonesia has a population of almost 248 million, ranking it as the fourth-most populous country in the world behind China, India and the United States. Among the world’s top 20 economies in terms of GDP, Indonesia achieved 4%-plus economic growth in 2009 to become one of only a small number of major economies to grow during the “Great Recession.”

A big advantage that helped Indonesia during the downturn is the nation’s vast natural resources, which let it benefit from the China-driven commodities boom and should boost Indonesia’s economy going forward. The country also now appears to have political stability. That reduced political risk is no small accomplishment in a nation that previously had endured civil unrest. Indonesia's second-term President Susilo Bambang Yudhoyono, known better by his initials SBY, is a former army general who took office in 2003 and has led reforms that included trimming the government’s debt as a percentage of GDP to about 30%.

SBY also played a role in ending a civil war with renegade provinces and launching an anti-corruption drive that jailed politicians and central bank officials. His plan for Indonesia during the next five years includes increasing economic growth to 7% by 2014, cutting the poverty level to 8%, and slashing unemployment to 5%. In addition, the government plans to spend up to $34 billion to build roads, ports and power plants by 2017. Combined with projected private sector growth, Indonesia’s $433-billion economy should almost double to $800 billion in the next five years.

Even though IDX has been a solid performer so far this year, it appears to have more room to run. If global markets rebound during the second half of the year, IDX should be able to finish 2010 among the top-performing funds in the world.

As always, I am happy to answer your questions about ETFs, so do not hesitate to email me by clicking here. You just may see your question answered in a future ETF Talk.