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These International ETFs Outperformed All Others In 2016
From Zacks: The global markets have been on a roller coaster ride this year thanks to some key developments. Initially, several China-driven offhand events and a 12-year low oil price triggered a market rout while Brexit swept it away with fears and uncertainties in June.
Meanwhile, growth worries in global superpowers like the Euro zone and Japan continued to peek and hide. However, confirmation of easy money policies in both regions offered some moderate market bounces in the last leg of the year. Comparatively, emerging markets have done well this year thanks mainly to a commodity market recovery and subdued greenback for the most of the year (read: Commodities Enter Bull Market: 6 ETF Winners).
If you want to know the overall impact on the bourses, Vanguard FTSE Europe ETF (VGK – Free Report) is down about 5% (as of December 23, 2016), iShares MSCI Emerging Markets (EEM – Free Report) has advanced 5.9% and iShares MSCI Japan (EWJ – Free Report) has notched up only 2.5% higher.
Investors should note that iShares MSCI All Country Asia ex Japan (AAXJ – Free Report) has added about 1.4% and all-world ETF iShares MSCI ACWI (ACWI – Free Report) is up over 6%. Compared with this set of moderate-to-poor performers, a better-positioned U.S. market representative SPDR S&P 500 ETF ((SPY – Free Report) ) has tacked on 10.6% gains (as of the same date).
The price performance of these region-based ETFs was enough to give 2016 a subdued tag for international stocks, on average.
Still there are some hidden ETF gems that have surpassed the global stock market fund ACWI. We highlight them below (read: 5 ETFs Up Over 100% This Year).
SPDR S&P International Energy Sector ETF (IPW – Free Report) – Up 21.2%
The year 2016 has been all about oil’s sporadic moves from bear to bull. The commodity reeled under acute pressure to start the year. However, it made several attempts to bounce back with three OPEC meetings scheduled for an output cut.
Finally, a deal was cut in November. As a result, Brent crude ETF United States Brent Oil (BNO – Free Report) has added about 25.3% so far this year, benefitting this international energy sector ETF (read: BP Surprise Earnings Beat Boosts Global Energy ETFs).
SPDR S&P International Materials Sector ETF (IRV – Free Report) – Up 18.7%
Since manufacturing activities have been on an uptrend globally, this material ETF have received a boost. The fund is heavy on economies like Japan, Australia, Germany and Canada – most of which are practicing easy money policies. Therefore, low interest rates probably have translated into higher manufacturing activities and the resultant demand for materials.
Oppenheimer ADR Revenue ETF(RTR – Free Report) – Up 11.8%
The fund looks to track the S&P ADR Index. Each security in the fund is weighted by top line. Toyota Motor Corp -Spon ADR (5.01%), Petrochina Co Ltd -ADR (5.01%) and China Petroleum & Chem-ADR (4.92%) are the top three sectors of the fund.
SPDR S&P International Dividend Currency Hedged ETF(HDWX – Free Report) – Up 10.8%
Now, with low bond yields prevailing in most developed countries for the most of 2016, demand for hefty current income must have been solid. HDWX – which gives exposure to the 100 highest dividend-yielding common stocks and ADRs – yields about 7.25% annually. The fund is heavy on Australia, U.K. and Canada. Plus, a currency-hedged approach proved to be a positive for the fund given the latest strength the greenback.
MSCI All World ex US High Dividend Yield Hedged Equity ETF (HDAW – Free Report) – Up 8.6%
This fund is another yield-destination armed with currency-hedged exposure. U.K., Canada and Germany have considerable exposure in the fund. The 30-day SEC yield of the fund (as of September 30, 2016) was 3.88% annually (read: 6 Dividend ETFs of 2016 with Over 3% Yield & 20% Returns).
The Vanguard FTSE Europe ETF (NYSE:VGK) closed at $47.58 on Friday, up $0.19 (+0.40%). Year-to-date, VGK has declined -2.16%, versus a 10.74% rise in the benchmark S&P 500 index during the same period.
VGK currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #17 of 93 ETFs in the European Equities ETFs category.
This article is brought to you courtesy of Zacks Research.
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