5 Tips For Going Global With ETFs

Exchange traded funds (ETFs) are a low-cost route to diversifying your portfolio globally. Marc Hogan of BusinessWeek writes that international stocks are expected to outperform their U.S. counterparts for a sixth straight year in 2007. Insiders believe 20% of your total holdings is proper international exposure, even after such a long winning streak. Remember that the international markets can be volatile. Still, exposure to foreign stocks can be convenient with ETFs so here are some tips for investors, Five For The Money:

• Cover The Basics: iShares MSCI EAFE (EFA) is made up of foreign developed-market stocks with exposure in Europe, Australia and Asia.  The ETF was up 23% last year.
• Tap Into Emerging Markets: Vanguard Emerging Markets Stocks Viper (VWO) and iShares MSCI Emerging Markets (EEM) follow the same benchmark and give exposure to emerging markets across the globe.
• Take A Regional View: There are ETFs that focus on certain regions of the world, such as Vanguard European Stock (VGK) and Vanguard Pacific Stock (VPL)
• Head To The Country: There are numerous ETFs that give you exposure to a certain country in the world.  To name a few, iShares MSCI Hong Kong (EWH), iShares MSCI Singapore (EWS) and iShares MSCI United Kingdom (EWU).
• Consider Real Estate: A new ETF was launched recently that focuses on international real estate, SPDR Dow Jones Wilshire International Real Estate (RWX).  While there isn’t past performance, there is the opportunity to invest in this particular niche if you so incline.

For full disclosure: some of Tom Lydon’t clients own EEM and EWS.