ETF Trends publisher Tom Lydon appeared on Fox Business Network’s ‘Mornings With Maria’ on Tuesday to discuss the state of the markets and investing opportunities outside the U.S.
Lydon was joined on a panel featuring host Maria Bartiromo as well as Dagen McDowell, Brian Brenber and Amy Holmes.
Lydon said the markets have remained healthy from a fundamentals standpoint, adding 75% of companies have beat earnings expectations.
“From a technical standpoint, markets came down to the 200-day moving average,” Lydon said. “We’ve had more than a 50% retracement. And when you look at the ETF space, we had record flows in January. And even though during that correct period, we saw about $25 billion go out, most of it was in the biggest ETF, SPY, which was about $19 billion.”
Lydon said most of the biggest ETF inflows during the past year have been outside the U.S., in developed and emerging markets.
“U.S. investors have had that home country bias where we’ve been really comfortable with the growth that we’ve seen,” he said. “We’re seeing valuations overseas picking up.”
Lydon pointed to the PowerShares S&P Emerging Markets ETF (EEMO) and the SPDR S&P Emerging Markets Dividend ETF (NYSEArca: EDIV) as great emerging market plays.
“When you look at Tencent and Alibaba, if you don’t have those types of companies in your portfolio, grab some Emerging Markets ETFs,” he said. “Especially when PE is around 12, compared to 20 in the U.S.”
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