Ideas for International ETF investing. European ETFs, Asian ETFs
European ETFs without Euro headaches, Asian ETFs
Investment Ideas - International ETFs
Idea #1: ETF investing in Europe. I've been watching the crisis in Greece, and realizing how the game of international investment has changed. Greece will most likely default on some of their debt, and the international bond market has responded, even remembering that countries like the United States are capable of default. High sovereign debt is going to be a real problem for borrowing nations.
If you are thinking about a European ETF, you might want funds that represent countries without a lot of sovereign debt. And as a bonus, you might want nations that aren't attached to the Euro currency, and won't be bailing out Greece, or Portugal, or Spain, or…
Here’s a few funds that cover countries that I think will outperform the rest of Europe:
GXF – Global X Nordic Fund. This find aims to track the FTSE “Nordic 30” Index, which covers large-cap companies in Norway, Sweden, and Denmark – three countries who must be pleased about NOT adopting the Euro as their currency. As a downside, the index is approximately 17% Finnish companies (Finland is a Euro nation), but that isn’t enough for me not to recommend this as a non-Euro alternative.
PLND – Market Vectors Poland ETF Fund. This Van Eck Fund uses its own proprietary index, which to me is unfortunate, but a necessary trade off for an ETF covering a relatively small country. I believe in Poland as a country primed to receive new investment. Politically, it’s relatively conservative, and it’s a Non-Euro nation. But it’s not like Western Europe: in some ways, it’s a lot closer to an emerging market. From where I sit, both of those items are positive, and adding low debt makes it a great candidate to grow faster than Europe in the long term.
EWL - iShares MSCI Switzerland Index Fund - If you are looking for a true AAA country, look no further than Switzerland. A country with stability for five centuries, and a culture defined on steadfast sensibility. In times of crisis, Switzerland is the save haven.
Idea #2: ETF investing – Asia. Investing in Asia was not a cheerful situation in 2011. Japan recovers from the catastrophic earthquake and tsunami, while the Chinese economy, while opening up gradually, still feels false, with their currency nailed to a fragile plaster wall, and the inner majority of the country still a third world nation. This leaves huge holes in the international economy of a major world region. As an alternative, think about these two countries with ETF’s that may provide you with exposure and diversification on the other side of the date line.
EWY: iShares MSCI South Korea Index Fund
EWA: iShares MSCI Australia Index Fund
These two iShares funds are simple, easy investments into the largest companies of South Korea and Australia. These two countries are both deeply connected with the Asian economy, but also the Pacific Rim and international economies as well. Both are based upon an established MSCI index, and both countries are stable first world nations with capitalist economies which closely match the culture of our own US/European markets.
If you are looking for exposure to China, Indonesia, Malaysia, India, or other smaller or less developed countries in Asia, you may wish to look at emerging markets funds, but also note that South Korea and Australia are also economically connected with these nations, so I would expect their funds to track each other somewhat.
For Commodity ETF ideas, see this article!
If your portfolio needs international diversity, talk to your financial adviser about the consequences of adding these funds to your portfolio, and completely understand the prospectus of funds purchased. These funds are recommended for your review, not for purchase. No guarantee of returns, excess returns, or reduced risk is implied.