Trade wars, especially between the United States and China, have not only wreaked havoc on economic superpowers, but emerging markets have also received a brunt of the punishment with ETFs like Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO) down 7.32% year-to-date and iShares MSCI Emerging Markets ETF (NYSEArca: EEM) down 7.44% YTD.
Even country-specific ETFs on the periphery are suffering as a result of trade wars–iShares MSCI Mexico Capped ETF (NYSEArca: EWW) down 3.13% YTD, iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) down 19.48% YTD and iShares MSCI Philippines ETF (NYSEArca: EPHE) down 22.03% YTD.
“We’ve seen areas of the world that have really gotten beaten up,” said ETF Trends President Tom Lydon. “Areas like Brazil, Mexico, Malaysia, the Philippines–all because of the trade wars.”
The amount of red in the YTD performance numbers might scare off investors with an untrained eye, but to others, this presents a perfect buying opportunity, particularly when fundamentally analyzing each country-specific ETF.
“While these areas of the world have gotten beaten up and we’ve got some political restructuring going on in some of these countries, take advantage of some of the sell-offs that we’ve seen,” said Lydon. “Some of these areas of the world are still off 70, 80 percent.”
For broad based technology exposure, Lydon said look no further than the Invesco QQQ (NasdaqGM: QQQ).
For lead-footed investors naturally inclined to step on the investment accelerator when they see green, the technology sector has been the ideal expressway to profits. For investors looking to allocate capital in tech and dip into emerging markets, the Emerging Markets Internet & Ecommerce ETF (NYSEArca: EMQQ) provides the perfect amalgamation of the two sectors.
“You can not only pick up the Ubers of the US, but you can have the Ubers of areas like India or the Amazons of Brazil,” said Lydon.
Facebook Slides After Hours, ETFs with FB Follow
During the course of today’s trading session, Facebook shares were up (almost 3.5%) prior to reporting their second-quarter earnings report with analysts expecting another solid quarter despite a massive data-harvesting scandal.
“There are high expectations following Google’s strongdigital ad revenue,” said Tigress Financial Partners CIO Ivan Feinseth. “I think the whole focus is going to be on the growth of Instagram. Instagram has the potential to be as big as Facebook itself.”
However, Facebook reported its second-quarter earnings to mixed results–earnings per share were reported at $1.74 versus consensus estimates of $1.72 EPS, but the social media company missed on revenue–a reported $13.23 billion versus consensus estimates of $13.36 billion. As such, shares of Facebook fell by 24% after hours after closing the day up 1.32%.
Two ETFs with the largest weightings of Facebook were already down after hours–Communication Services Sel Sect SPDRETF (NYSEArca: XLC) was down 1.41% after ending today’s trading session up 0.72% while Vanguard Communication Services ETF (NYSEArca: VOX) was down 0.44% after hours.
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