Related: Down Under Opportunity
Thanks to comparatively high interest rates, Australia ETFs like EWA sport enticing dividend yields, which can help investors generate current income while expanding the international portions of their portfolios. EWA has a trailing 12-month dividend yield of 6%, or nearly triple the comparable yield on the S&P 500.
There is some speculation that RBA is nearing the end of its lengthy tightening cycle. If that is the case, the Australian dollar and the CurrencyShares Australian Dollar Trust (NYSEArca: FXA), which tracks the Aussie against the U.S. dollar, could get a lift. That could be a boost to the unhedged EWA.
“At the same time we continue to believe that U.S. rates will rise at least once this year. September may be looking unlikely, but by the end of the year we expect to have seen at least one rate increase,” notes the Seeking Alpha piece.
iShares MSCI Australia ETF
