The Omicron variant introduced a new challenge for investing into an already-tricky international market outside North America, but it doesn’t have to be difficult with the right exchange traded fund (ETF).
Investors will often flock to international opportunities overseas in order to maximize gains while adding more diversification. That said, however, the international markets present their own set of risks that investors must take into account.
“The key to wise investing lies in your ability to minimize risks while maximizing the returns successfully,” notes a Finance Magnates article. “It also requires that the diversification of your portfolio involves some stable securities that are balanced by rapidly-developing assets.”
“With a proper asset mix, you have an excellent chance of making more money while participating in a thrilling and fast-growing investment space that offers a broad range of options,” the article says further. “Geographical diversification is when investors invest across geographic regions to curb risk and boost returns.”
Getting that added dose of diversification is key to avoid over-concentrating assets in one specific geographic region. International markets can get volatile, so risk management is always imperative, especially when venturing overseas.
“Such a practice allows you to access and bet on various types of global market investments,” the article notes. “It also reduces your exposure to domestic exchanges and expands it across different markets, helping mitigate the impact of volatility.”
“ETFs or mutual funds that invest in international funds can indirectly help you invest across world markets,” Finance Magnates says. “There are mutual funds that invest in more than one ETF or index funds or securities overseas, which can provide you indirect access to foreign markets.”
Pure Play at Low Cost
One such ETF is the Invesco PureBeta FTSE Developed ex-North America ETF (PBDM), which, as the name implies, gives ETF investors exposure to markets outside of North America at a total expense ratio of just 0.07%. The fund seeks to track the investment results (before fees and expenses) of the FTSE Developed ex North America Index.
The fund generally will invest at least 90% of its total assets in common stocks that comprise the underlying index, as well as ADRs and GDRs that represent securities in the underlying index. The index is designed to measure the performance of the large- and mid-capitalization segments of equity markets of countries around the world that are classified as developed markets within the country classification definition of the index provider, excluding the United States and Canada.
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