ETF Trends
ETF Trends

These days, there are exchange traded funds (ETFs) that cover most major asset classes, sectors and regions. While commodities and currencies have value, don’t discount the importance of global exposure.

Carl Delfeld explains that he uses country-specific ETFs as a portfolio core, complemented with global sector ETFs. Among the many benefits of global investing include:

  • Country-specific ETFs make it easy to access foreign economies, especially those that have limits on foreign investment
  • Global ETFs give true and diverse exposure to the local economy, making them indispensable to every portfolio
  • Gains by U.S. investors in overseas markets have enjoyed a “dollar kicker” when assets are repatriated to U.S. dollars
  • Country-focused ETFs are a good way to aim a portfolio at weighting countries more on growth potential rather than market capitalization; this way, any growth potential is harnessed and none of those gains are left out
  • Single country funds also make plays upon other areas; for example, Australia can give good exposure to commodities, and is in the position to spot most of China’s growth; Singapore’s ETF also has high exposure to industrials and telecommunications
  • By using the single-country ETFs, it is possible to challenge the larger conventional indexes, and still garner the diversification and gains.

Delfeld cites Australia and Singapore as good examples of single country funds that have weathered the recession quite well. Singapore is a high-quality market at the center of Asia’s growth. GDP grew 14.9% annualized in the third quarter. Australia is benefiting from an upbeat mood among its denizens.

For more stories about global ETFs, visit our global ETF category.

  • iShares MSCI Australia Index (NYSEArca: EWA): up 74.7% year-to-date

  • iShares MSCI Singapore Index (NYSEArca: EWS): up 57.3% year-to-date

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.