Single-country focused exchange traded funds (ETFs) are well-recognized for their investment benefits and instant diversification. They are one of the most simple ways to gain foreign stock exposure across a range of sectors, with less volatility and expense than single stocks.
Single-country ETFs offer instant currency diversification, with precise, and concentrated exposure. They take the guesswork out of single-stock picking from a faraway and unknown economy, says ETF Guide.
For a long time, iShares was one of the only providers of single-country ETFs, but lately we’ve seen the options expanding. The iShares line has 29 such funds, and this year has seen the launch of a number of single-country funds from Northern Trust, as well, and some of those cover new territories.
Among the offerings are:
- NETS ISEQ 20 Index Fund (IQE): Covers Ireland; launched June 16
- NETS PSI 20 Index Fund (LIS): Covers Portugal; launched May 21
- iShares MSCI Israel Capped Investable Market Index Fund (EIS): up 10.2% since March 31 inception
- iShares MSCI Malaysia Index Fund (EWM): down 17.5% year-to-date
- Market Vectors Russia (RSX): up 3.1% year-to-date
iShares MSCI Brazil (EWZ) and iShares MSCI Canada (EWC) are the two top-performing single-country ETFs year-to-date, up 3.5% and 8.9%, respectively.
When considering single-country funds, be sure to look at the holdings and sector/company weightings. If you’re already invested in energy, then you might not be interested in Russia’s ETF, because it’s 42.6% weighted in the sector. Malaysia’s ETF is 30.9% weighted in financial services, and if you’re skittish about the industry, it may not be the fund for you.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.