Foreign ETFs For Diversification
March 3rd at 1:35pm by Tom Lydon
Foreign investing has become easier through exchange traded funds (ETFs). Given there are no crises or panics, investing overseas can reduce volatility, improve returns, and offer diversification. Investing in foreign markets can also offer protection during a bear market. Roger Nusbaum of TheStreet.com states Europe, as a region, parallels the U.S. too much, therefore offering no real diversification.
An area to consider for diversification might be Australia. This developed nation is more commodities-based and investing in a country with a different economy could help a portfolio. Commodities are not the only part of the country, services also play a key role. iShares MSCI Australia (EWA) includes BHP Billiton, the largest global resource company, and several financial services companies. EWA is up 4% year-to-date.
