In the first part of the series, we looked into six reasons why investors should own emerging market (EM) Indices heading into 2017. However, there are so many EMs to look at and consider. Which EMs are poised for an outperformance? Here are four EMs whose ETFs are highlighted by Credit Suisse (CS) as the top EM ETFs that you need to own.

1. China: Stimulus to Drive Chinese Economy

PBOC

In order to increase liquidity within the Chinese economy, the People’s Bank of China (PBOC) injected a sizeable amount of money supply to bolster private sector investment. According to CS, the PBOC’s ongoing monetary stimulus will continue to encourage corporate spending  to provoke a recovery. Moving forward, economists at CS expect PBOC to focus on maintaining ample liquidity for Chinese banks. PBOC could cut reserve requirement ratio (RRR) if required.

China’s State Council is also looking to push for more fiscal stimulus, according to the statement of the recent meeting of the Council Standing Committee. Moreover, the rising PMI manufacturing output survey recorded through 2016 suggests that the Chinese economy is on track for continued growth in 2017, rather than the much-feared hard landing.

ETFs to Consider: UNITED SSE 50 CHINA ETF (JK8); db x-trackers FTSE China 50 UCITS ETF (HD8); db x-trackers CSI 300 (KT4)

2. Korea: Undervalued Among EMs

Korea is one of the largest beneficiaries among EMs in light of the recovery of the US economy. Moreover, the pressure on Korean Won (relative to Japanese Yen) provides a favourable condition for the Korean manufacturing export sector, given that there is a significant 72 percent export composition overlap between Korea and Japan.

Korea Undervalued

Korea’s KOSPI index currently trades at 10x 12-month forward sector-adjusted consensus earnings. At its current valuation, Korea is among the cheapest of the larger MSCI EMs. CS recommends holding Korea’s KOSPI ETF as a value play considering the deep discount.

ETFs To Consider: db x-trackers MSCI Korea UCITS Index ETF (IH2) ; Lyxor ETF MSCI Korea (AO9)

3. Brazil: 2017 Will Be the Turnaround Year

Since the July 2011 peak, Brazilian Real’s effective exchange rate had dropped by 44 percent to levels unseen in the past decade.  On the bright side, CS is forecasting a strong recovery in export growth in 2017. CS expects GDP growth in 2017 to be the strongest in almost a decade. There are also early signs that Brazil’s economy is experiencing a turnaround.

ETFs to Consider: db x-trackers MSCI Brazil Index UCITS ETF (J0O)

4. Indonesia: Investments Will Drive Growth In 2017

Bank Indonesia

If Indonesia’s PMI survey is indicative of its economic performance in 2017, Indonesia economy is set to enjoy accelerating growth in economic activity heading into 2017. Indonesia economists at CS forecast real GDP growth in 2017 to be 5.4 percent. This is mainly driven by the 6.1 percent growth in fixed investment thanks to a continued upswing in the government’s fiscal expansion. Indonesia’s investment will contribute 33.5 percent to GDP by year-end 2017, which is the highest level recorded for Indonesia in at least two decades.

ETFs to Consider: db x-trackers MSCI Indonesia Index (KJ7); Lyxor ETF MSCI Indonesia (P2Q)