Foreign Focused ETFs Rebounding

Exchange traded funds (ETFs) with a foreign market focus are in the spotlight once again.  The sell-off in the China markets last month shook the global markets and investors raced to pull money from foreign funds, however those ETFs seem to be coming back.  Since the market low on March 5th, iShares FTSE/Xinhua China (FXI) is up 10.6%, iShares MSCI Australia (EWA) is up 10.8% and iShares S&P Latin America (ILF) is up 10.2%.

Jane J. Kim and Aaron Lucchetti for The Wall Street Journal report on investing abroad.  Americans are still getting used to overseas investing, and still have small amounts tied to them.  With emerging economies growing fast and capital markets maturing, it is difficult to invest only in domestic markets.  There are risks though, such as volatility, changes in exchange rates and lack of transparency.

For full disclosure, some of Tom Lydon’s clients own ILF.