When it comes to accessing global markets with exchange traded funds, diversified plays are still among many investors’ first choice.
For example, the iShares MSCI EAFE ETF (NYSEArca: EFA) and the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO) are two of the four largest ETFs of any type. The Vanguard FTSE Europe ETF (NYSEArca: VGK) and the iShares Core MSCI Emerging Markets ETF (NYSEArca: IEMG) are two of the fastest growing ETFs listed in the U.S. [An Emerging Markets ETF for the Long Haul]
Advisors and investors also like single-country ETFs and their affinity for such funds has recently increased. “According to ETFGI, an independent investment research firm, over the last five years, assets in non-U.S. country funds have grown by 204 percent to $376 billion,” reports Bryan Borzykowski for CNBC.
Reasons for the increased popularity of single-country ETFs, according to CNBC, include the explosion in the amount of such funds on the market. It is not a stretch to say that as the ETF industry evolves, there might be more countries that are represented by at least one ETF than are not. Favorable fees are not reason cited by CNBC as is the increased popularity of currency hedged products.
The WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ), a hedged currency ETF, has hauled in $9.2 billion this year, making it the second-best ETF in terms of 2013 inflows. Other ETFs have benefited from advisors’ efforts to mitigate currency risk in client portfolios, including DXJ’s rival, the db X-trackers MSCI Japan Hedged Equity Fund (NYSEArca: DBJP) and the WisdomTree Europe Hedged Equity Fund (NYSEArca: HEDJ).
DBJP and HEDJ are both currency hedged products and both have seen massive percentage increases in assets under management this year. [10 ETFs That More Than Doubled in Size]