Many say that international equities, both developed and emerging markets, are inexpensive relative to domestic equivalents. However, experienced investors know there are important differences between good value and value traps.
That means it’s important that market participants be discriminating when it comes to international equity exchange traded funds. The Calvert International Responsible Index ETF (CVIE) is an avenue through which investors can accomplish that objective.
CVIE, which follows the Calvert International Responsible Index, is pertinent today not only because international stocks sport attractive valuations, but also because the fund is home to a slew of stocks with quality traits, including several with wide moat benefits.
Healthy Outlook for CVIE
CVIE allocates 11% of its roster to healthcare stocks, making that the ETF’s fourth-largest sector weight. That’s important because attractively valued wide moat stocks are some of the fund’s healthcare holdings, including GSK.
“GSK reported solid earnings in the most recent quarter. Conover thinks the market underappreciates the global growth potential for the company’s shingles and RSV vaccines, and remains overly concerned about Zantac litigation. GSK stock trades 34% below our fair value estimate of $54 today,” noted Morningstar’s Susan Dziubinski.
Swiss pharmaceuticals giant Roche Holdings is another example of a CVIE member firm with wide moat traits and enticing valuations. Roche is a top 10 holding in the Calvert ETF.
“This Swiss healthcare giant is in a unique position to guide healthcare into a safer, more personalized, and more cost-effective endeavor,” observed Morningstar strategist Karen Andersen.
Adding to the case for CVIE as a wide moat value play is Taiwan Semiconductor (NYSE: TSM). As the world’s dominant semiconductor fabricator, Taiwan Semiconductor is levered to all things chips, including rising demand powered by artificial intelligence. The stock is CVIE’s largest holding at a weight of 2.16%.
“The stock of the world’s largest dedicated contract chip manufacturer rounds out our list of the best stocks to buy this month. We believe Taiwan Semiconductor will be a significant beneficiary in high-performance computing, including generative artificial intelligence,” pointed out Morningstar analyst Phelix Lee.
Japanese stocks account for nearly 17% of CVIE’s geographic weight, and while Japan is one of the world’s best-performing equity markets this year, some market observers still view stocks there as inexpensive. That’s certainly true of several of the other markets represented in the ETF, including France and Germany, among others.
For more news, information, and analysis, visit the Responsible Investing Channel.