Indeed, investors may be so enamored by monetary stimulus, exchange-traded stock funds like Australia (EWA) and the United Kingdom (EWU) are seeing a pick-up in demand. The Reserve Bank of Australia is holding rates at record lows while not saying a word that might be construed as “less accommodating.” Similarly, the Bank of England is still printing pounds to purchase assets; they have not openly discussed tapering with the public either. In effect, both EWA and EWU have demonstrated greater momentum than the S&P 500 over the last two months.
For believers in the prospect of owning foreign developed markets, EWA and EWU currently boast annualized dividendsof 6.2% and 2.8% respectively. Both boast higher payouts than S&P 500 funds; both have lower price-to-earnings ratios as well.
Gary Gordon is president of Pacific Park Financial, Inc.