“We believe an escalation will likely be averted and that a trade resolution and weaker [U.S. dollar] will lead to a ‘risk on’ convergence,” the strategist said.
In a separate note, J.P. Morgan’s Bram Kaplan added on to the “risk on convergence” call, predicting emerging markets will outperform the U.S. stock market ahead and adding that in this scenario the domestic stock market will still go higher but not as much as international equities.
To capitalize on a potential turnaround in international markets, ETF investors may look to a number of targeted international plays. For instance, the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO) and the iShares Core MSCI Emerging Markets ETF (NYSEArca: IEMG) are two most popular and largest EM-related ETFs on the market.
The iShares MSCI EAFE ETF (NYSEArca: EFA) and Vanguard FTSE Developed Markets ETF (NYSEArca: VEA) are two popular ETF picks to track developed markets outside the U.S., including developed European, Australasia and Far East countries.
For more information on the international markets, visit our global ETFs category.