As highlighted by EWA’s combined 21% weight to the materials and energy sectors, Australian stocks are vulnerable to the commodities slowdown.
Although Australia’s interest rates reside at a record low of 2.5%, those are high by the standards of the developed world and enough to cement Australia’s as one of the highest-yielding advanced economies in the world. EWA has a trailing 12-month yield of 3.92%.
The ride to EWA’s tempting yield is unlikely to be smooth the ETF’s three-year standard deviation of 19.1% has more an emerging markets than developed markets feel. Additionally, the S&P/ASX 200 VIX closed November at 14.6, up nearly 210 basis points from a month earlier.
iShares MSCI Australia ETF
