More people are looking into international markets to enhance or diversify their portfolios, but not all economies are the same. Investors, though, can better control their global exposure through country-specific ETFs.
“The benign global economic backdrop has elevated the importance of country risks for investors, driving down inter-country correlations and increasing potential opportunities. Country differentiation will matter in 2018, as each country faces a unique set of risks. Naturally, investing in only some of these countries may be worth the risks,” Christopher Dhanraj, Director and Head of ETF Investment Strategy at BlackRock, said in a research note.
Specifically, BlackRock favors countries like Japan, Brazil, China, India and Indonesia on the global stage.
In Japan, Abenomics under Prime Minister’ Shinzo Abe continues to support the economy. The Bank of Japan is also committed to fuel inflation after the developed Asian economy suffered through decades of deflationary pressures. To access Japanese markets, investors may look at something like the iShares MSCI Japan ETF (NYSEArca: EWJ).