The Growing Case for International ETFs | ETF Trends

When looking at the economic climate in the United States, you might not be getting the warm n’ fuzzies. Though you shouldn’t forgo all domestic investment opportunities, you may want to consider looking at international exchange traded funds (ETFs), too.

The U.S. Commerce Department recently reported that last quarter’s annual growth rate was revised down to 1.6%, writes Walter Updegrave for CNN Money. The Financial Report of the U.S. Government also shows that the government was in the red by $1.3 trillion in the last fiscal year.

It’s true that the United States has bounced back from the brink of economic disaster, you may want to consider the diversification benefits offered by international funds. Some advisors recommend holding up to 30% of a portfolio in foreign investments. However much you choose to hold, there are a number of international ETFs that are above their 200-day moving average; you can find them in the ETF Analyzer by sorting:

A few things you should note before jumping into international ETFs:

  • These markets aren’t as easily accessible as developed markets or other asset classes. For that reason, spreads may sometimes be wide on international ETFs focused on esoteric emerging markets. Watch the bid/ask to keep your costs under control. [5 Ways to Cut the Costs of ETF Investing.]
  • Single-country or regional ETFs may be heavily weighted in certain sectors or stocks. For example, many markets in Latin America are heavy in natural resources and the resulting ETFs are often commodity plays, in part. [What’s in that Single-Country ETF?]
  • Additionally, emerging markets are more volatile and riskier than those of developed markets. Have an entry and exit strategy in place before you buy.

Fore more information on international ETFs, visit our global ETFs category. There are hundreds of global equity ETFs. You can find them all and sort by performance, yield and more by using the ETF Analyzer.

Better yet, you can track performance and set up fund alerts when you sign up to become a premium member. Watch this video to learn much more.

Max Chen contributed to this article.

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.