Australia ETF Starts 2017 in Style

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 4%, or nearly double 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.

Australia’s looser monetary policy could support the economy but weigh on the AUD. Consequently, investors may track the markets through currency-hedged ETFs that try to mitigate the negative effects of a weakening Aussie, including the iShares Currency Hedged MSCI Australia ETF (NYSEArca: HAUD) and Deutsche X-trackers MSCI Australia Hedged Equity ETF (NYSEArca: DBAU).

“Based on the height of the pattern, traders will likely set their target prices near $23.61. Most active traders will likely set their stop-losses below the sloping trendline or the 200-day moving average ($19.61) depending on their risk tolerance,” notes Investopedia.