ECB Stimulus Signals Risk-On for Global Stock ETFs

The European Central Bank’s decision to increase monetary stimulus could allow easy money to flow into global markets, bolstering exchange traded funds that track international equities.

In response to the promise of cheap money out of the ECB, Goldman Sachs Group raised its short-term outlook on global equities to overweight, Bloomberg reports.

“The net effect of the policy action from here will be positive for equity markets,” analysts lead by chief global equity strategist Peter Oppenheimer said in a research note.

Investors can capture global markets through all-world country ETFs like the Vanguard Total World Stock ETF (NYSEArca: VT) and iShares MSCI ACWI ETF (NasdaqGS: ACWI). [Have You Upped Your Global Stock ETF Game?]

Alternatively, U.S.-equity-heavy investors can target international ex-U.S. ETFs such as the Vanguard Total International Stock ETF (NYSEArca: VXUS), Vanguard FTSE All-World ex-US (NYSEArca: VEU), and iShares MSCI ACWI ex U.S. ETF (NasdaqGM: ACWX).

Additionally, ETF investors can break down international exposure to developed and emerging markets. For instance, the iShares MSCI EAFE ETF (NYSEArca: EFA) and Vanguard FTSE Developed Markets ETF (NYSEArca: VEA) both track developed markets outside of North America.

The iShares MSCI Emerging Markets ETF (NYSEArca: EEM) and Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO) provide access to the world’s developing economies. The emerging markets were among the best performing areas during the last infusion of easy money from the Fed as investors used funneled billions into riskier assets.