This week Taiwan and China will be finalizing a major economic pact that will significantly enhance trade between the two countries. As a result, ETFs that track these two markets are projected to reap the benefits.

The Economic Cooperation Framework Agreement, which is scheduled to be finalized on Tuesday, will most notably reduce tariffs on more than 800 products. According to TheStreet, two-way trade over the Taiwan Strait is estimated to increase by $100 billion due to the pact.

With Taiwan being the smaller market, it is likely to observe more of an impact than China. The iShares MSCI Taiwan Index ETF (EWT: Profile, Quote, Advanced Chart, News) provides a way to easily capture any positive movements in the countrys market. EWT invests most heavily in technology as its biggest holding is a semiconductor company known as Taiwan Semiconductor Manufacturing.

The most popular ETF to invest in China is the iShares FTSE/Xinhua China 25 Index ETF (FXI: Profile, Quote, Advanced Chart, News), which invests heavily in the countrys financials.

In June of each year, MSCI performs an annual review to declare whether any country up for evaluation will be reclassified to a different market level. MSCI also communicates whether any new countries will be reviewed for the upcoming year.

According to the press release, this years market classification review hadno changes from the previous year. Four countries will not be moved to a different market classification and each of them will stay on the list to be re-evaluated during the 2011 Annual Market Classification Review.

Both Korea and Taiwan were under review to be considered Developed Markets, however, both will remain as part of Emerging Markets. The exchange-traded fund that tracks Taiwan is iShares MSCI Taiwan Index (EWT: Profile, Quote, Advanced Chart, News).

In the same way, UAE and Qatar were under review to be considered Emerging Markets, but both will remain as part of Frontier Markets for at least another year.

Planning for the future, Direxion has filed with the SEC to create 36 new funds. 34 of these will be bullish and bearish triple leveraged funds, all pending during the heat of a SEC review.

Following the popularity of geographically centered ETFs, many of the new funds will be leveraged around a portfolio of stocks from just one nation, giving short term traders and investors the opportunity to pinpoint certain regions. The SEC filing reveals triple-leveraged bull and bear funds for the following countries: Brazil, Canada, Indonesia, Malaysia, Russia, South Korea, Taiwan and Thailand.

The company also filed for commodity, energy, and plain-vanilla stock funds, most of which will be triple-leveraged. Two funds, the Direxion Auto Shares fund and the Direxion Airline Shares ETF, will be unleveraged investments. No ticker symbols or annual fees were announced.

A relatively unknown name in the exchange-traded fund industry, Asia Tigers Fund Inc. (GRR) is boasting hefty returns while the US markets continue to stagnate. The fund, which suffers from low volume and a relatively small market cap, continues to be a top performer, showing gains of 54% year to date.

Managed by Blackstone Asia Advisors LLC, the firm is one of the best diversified of any exchange-traded fund on the market today. According to a press release, its top ten holdings represent just 23.4% of the total assets of the fund, with its biggest position in Samsung Electronics, which makes up just 4.3% of the portfolio. The fund is not only diversified by company, but also by nation. Hong Kong, South Korea, China, Taiwan and India are home to the largest portions of the fund and represent 79.3% of assets.

Recently, investors have been able to buy the fund at a discount, often as much as 7% by July 31. Very few closed end funds ever trade at such a hefty discount.

A freshly launched exchange-traded fund from Emerging Global Shares promised broad diversification amongst emerging markets, though the fund’s holdings show otherwise. The Emerging Global Shares’ Dow Jones Emerging Markets Titans Composite Index Fund (EEG: Quote, Profile, Advanced Chart, News) seeks to invest in a vast array of stocks, but its current picks are not necessarily geographically diversified.

The exchange-traded fund is weighted like most selective, rather than broad, emerging-market funds, with much of its holdings resting in areas know as BRIC, or Brazil, Russia, India and China, according to The Street. The fund invests a combined 40% in China and Brazil, followed by 18% in India and 14% in Russia, which brings the BRIC total to a combined 72%. The ETF’s largest holding, Industrial and Commercial Bank of China, comprises a dramatic 8% of the fund and 40% of the total invested in China.

Other funds typically diversify in other Asian countries, choosing to invest in countries such as South Korea and Taiwan, which both exhibit fundamentally strong manufacturing economies. As with any exchange-traded fund, investors should read each ETF’s prospectus completely before investing, as the name of the fund often differs from its actual investing strategy.