Investors can also target global opportunities through smart beta options like the JPMorgan Diversified Return Emerging Markets Equity ETF (NYSEArca: JPEM), JPMorgan Diversified Return International Equity ETF (NYSEArca: JPIN) and JPMorgan Diversified Return Global Equity ETF (NYSEArca: JPGE).
The underlying customized FTSE Russell indexing methodology selects components based on a diversified set of factor characteristics, such as relative valuation, price momentum and quality. The enhanced indexing process would allow the ETFs to exclude expensive, low quality companies with poor momentum, which could help the ETFs diminish drawdowns without sacrificing too much from any potential upside of a market recovery.
Additionally, an actively managed strategy may also be a way for investors to navigate the intricacies of foreign markets. For example, the Davis Select Worldwide ETF (NasdaqGM: DWLD), which is managed by Goei, focuses on long-term global opportunities that incorporate Davis Advisors’ judgement experience, high conviction, low turnover, accountability and alignment.
The Davis team will also screen for fundamental characteristics, including cash flows assets and liabilities, and other criteria. Davis focuses on durable businesses with above average margin returns, strong competitive advantages and durability. Companies also have to show strong management that have been in place for over five years as long-term investors can be sure that these are ethical, honest people that will help the business last. Additionally, the management team will determine valuation or what’s the right price of the company, targeting long-term free cash flow of businesses, owner earnings and how durable the cash is available.
For more information on the ETF Trends Virtual Summit conference, visit our Virtual Summit page.