U.S. money managers have been funneling more assets into overseas markets, hoping to capitalize on cheaper valuations. Retail investors can also diversify away from U.S. stocks with international stock exchange traded funds as well.
Krishna Memani, chief investment officer at Oppenheimer Funds Inc., has advised portfolio managers to shift in to Europe, Japan and developing countries like China, Indonesia and India, reports E.S. Browning for the Wall Street Journal.
Other money managers like Dan Morris, global investment strategist at TIAA-CREF Asset Management, has also been moving money abroad. Jack Ablin, chief investment officer at BMO Private Bank, remains positive on Europe. Observers are pointing to the small signs of economic improvement in the Eurozone.
Investors who are seeking to diversify into these areas can utilize region- and country-specific ETFs to capture the developed and emerging markets.
For instance, the Deutsche X-trackers MSCI EMU Hedged Equity ETF (NYSEArca: DBEZ), iShares Currency Hedged MSCI EMU ETF (NYSEArca: HEZU) and WisdomTree Europe Hedged Equity Fund (NYSEArca: HEDJ) have been popular plays to capture Eurozone equities since the ETFs hedge against a weakening euro currency. Consequently, the hedged-equity ETFs would outperform a non-hedged ETF if the euro currency continues to depreciate. [Time for ETF Investors to Overweight Europe]
Similarly, the WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ) and the Deutsche X-trackers MSCI Japan Hedged Equity ETF (NYSEArca: DBJP) offer a hedged-Japanese-yen equity ETF play.