Heightened global market risks have weighed on investors, but there are still opportunities to be found. Investors can look to targeted exchange traded funds to access various promising market segments.
“A lot of investors when they’re worried about a global growth slowdown in 2019, 2020, are overlooking some opportunities that might actually be presented from that. Countries that might be sort of insulated from some of the broader macro headwinds whether that’s trade tensions or geopolitics,” Chelsea Rodstrom, Research Analyst, Global X ETFs, said at the 2019 Charles Schwab IMPACT conference.
For instance, Rodstrom highlighted the outperformance of the Greek market this year.
“If we look at Europe, for example, which has been a prime example of this slowdown, has also been one of the top performing emerging markets in Greece, which has had a really strong economic recovery,” Rodstrom said.
The Global X MSCI Greece ETF (NYSEArca: GREK) has been one of the best performing single-country ETFs, returning 44.4% year-to-date. GREK tries to reflect the performance of the MSCI All Greece Select 25/50 Index, which represents the broad Greece equity universe.
An improving political environment has been a boon to GREK and Greek financial markets. Looking ahead, the new government is less likely to undo some structural reforms that have been undertaken in the past. Furthermore, the risk of higher labor costs, less labor market flexibility and erosion of wage competitiveness would decline under a New Democracy-led government.
Rodstrom also underscored the potential opportunities in separate areas within China. Investors can also take a more focused approach to Chinese markets through sector-specific ETFs, including:
- Global X MSCI China Communication Services ETF (CHIC)
- Global X MSCI China Consumer Discretionary ETF (CHIQ)
- Global X MSCI China Energy ETF (CHIE)
- Global X MSCI China Financials ETF (CHIX)
- Global X MSCI China Industrials ETF (CHII)
- Global X MSCI China Materials ETF (CHIM)
- Global X MSCI China Consumer Staples ETF (CHIS)
- Global X MSCI China Health Care ETF (CHIH)
- Global X MSCI China Information Technology ETF (CHIK)
- Global X MSCI China Real Estate ETF (CHIR)
- Global X MSCI China Utilities ETF (CHIU)
“So, just like globally where there are opportunities in different markets, there are opportunities within China, within different sectors,” Rodstrom added.
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