ETF Spotlight: Single-Country Funds | ETF Trends

Income seekers have delved into the markets in search of attractive payouts during this low-yield environment. Some have found enticing yields in country-specific exchange traded funds; however, potential investors should not let yields blind them and consider the underlying risks associated with the country in question.

Roger Nusbaum of The Street points to a recent Wall Street Journal column that focused on single-country ETFs with “safe” dividend yields greater than 4%.

Specifically, countries like Australia, New Zealand, Norway and Poland:

  • iShares MSCI Australia Index Fund ETF (NYSEArca: EWA): yield 5.24%
  • WisdomTree Australia Dividend Fund ETF (NYSEArca: AUSE): yield 6.25%
  • iShares MSCI New Zealand Investable Market Index Fund ETF (NYSEArca: ENZL): yield
  • Global X FTSE Norway 30 ETF (NYSEArca: NORW): yield 6.34%
  • iShares MSCI Norway Cppd Investable Mkt (NYSEArca: ENOR): yield 4.72%
  • iShares MSCI Poland Investable Market Index Fund ETF (NYSEArca: EPOL): yield 5.99%
  • Market Vectors Poland ETF (NYSEArca: PLND): yield 4.56%

While the yields look attractive, investors should consider country and regional risks, such as a country’s fiscal health, along with the actual make up of the funds, like holdings and sector weightings.

For instance, the iShares MSCI Spain Index (NYSEArca: EWP) has an impressive 13.76% yield, but investors would probably not hold this over a long-term period for obvious reasons concerning volatility and the country’s fiscal health. [European ETF Market Suffers Amid Debt Crisis]

Poland’s close proximity to the troubled Eurozone will also weigh on its export industry, while Australia is closely tied to trade with China.