Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Coronavirus: UK Parents Demand ALL Schools OPEN September, 7 Million Children Abandoned by Teachers - 9th Aug 20
Computer GPU Fans Not Spinning Quick FIX - Sticky Fans Solution - 9th Aug 20
Find the Best Speech Converter for You - 9th Aug 20
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
NATURAL GAS BEGINS UPSIDE BREAKOUT MOVE - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

ETF's Open the Door to Investing in Foreign Stock Markets

Stock-Markets / Exchange Traded Funds Jul 16, 2009 - 09:05 AM GMT

By: Money_and_Markets

Stock-Markets

Best Financial Markets Analysis ArticleRon Rowland writes: Once upon a time, Americans who wanted to invest in foreign stock markets faced all kinds of hurdles. For example, brokers often weren’t able to process orders on non-U.S. exchanges. And the few good global mutual funds that existed tended to have very high loads and fees. Plus you could expect to be harshly punished if you tried to make a short-term trade.


We’re in a new age now … thanks to the ETF revolution, you can spread your portfolio over just about the whole world — or only a few parts of it. And you get to pick which parts!

Today I want to run through the different categories of global ETFs. As you’ll see, with more than 200 of them now available, you can be as broad — or as specific — as you want.

Cover the World With Global ETFs …

Looking for simplicity? Then you may want to consider a global ETF that includes stocks from around the world, including the U.S.

VT gives you the world.
VT gives you the world.

For instance, take a look at VT — the Vanguard Total World Stock ETF. Just like the name suggests, it tracks an index of stocks from almost every exchange on the globe.

With VT you get the widest possible stock exposure with the ease of just one trade. It’s a great option for those who like one-stop shopping.

A slightly narrower group of ETFs tracks indexes of non-U.S. stocks only. Note the distinction here: “Global” or “world” ETFs include the U.S. and other countries. “Foreign” and “international” include various groupings of other world markets, but exclude U.S. markets.

A good example of a foreign ETF is the iShares MSCI EAFE, ticker EFA. The acronym EAFE stands for Europe, Australasia, and the Far East — the entire developed world’s markets outside the U.S.

A sister fund, the iShares MSCI Emerging Markets (EEM), tracks emerging markets. What, you might ask, is the difference between a “developed” market and an “emerging” market? Good question. And the answer is somewhat subjective …

Index providers, like MSCI, draw the line based on their ongoing analysis of each country. This means that countries can move from one category to the next. For instance, Israel was recently promoted to “developed” status by MSCI. South Korea and Taiwan are still considered emerging markets but will probably be reclassified soon. When this happens, the holdings in EFA and EEM are automatically changed — you don’t have to do anything.

And there’s even a category labeled frontier markets. These are the very small markets that don’t qualify for emerging market status. The Claymore/BNY Mellon Frontier Markets ETF (FRN) is one of the ETFs that attempts to capture these still-tiny niches. Its top holdings include stocks of companies from countries such as Egypt, Czechoslovakia, and Qatar.

Since you’re reading Money and Markets, I’ll bet you like to follow the markets more actively. Therefore, you might be interested in zeroing in on certain parts of the world. If so, consider looking at …

Regional and Country ETFs …

Maybe you think (as I do) that much of the world’s growth during the next few years will be in Asia. A broad fund then, like VT that includes the U.S. and Europe, wouldn’t exactly meet your requirements.

Good news: There are about 25 regional ETFs that specialize in specific areas of the globe!

JPP is a great way to invest in Japanese stocks.
JPP is a great way to invest in Japanese stocks.

So if you like the Asia Pacific region, you might consider the Vanguard MSCI Pacific (VPL). You’ll get exposure to stocks from Japan, Australia, Hong Kong, Singapore and New Zealand. Since VPL’s index is market-weighted, Japan is its biggest holding.

That’s not all …

You can pick from more than 45 single-country ETFs that trade in the U.S. just like regular ETFs and stocks. These ETFs let you easily follow market momentum as it travels around the world.

Maybe you want to target Japan … take a look at the SPDR Russell/Nomura Prime Japan (JPP), where you’ll find a portfolio full of Japanese blue chips. It’s just one of ten ETFs that focus exclusively on Japan.

Other examples of single-country ETFs, moving from East to West, include …

  • PowerShares Golden Dragon Halter USX China (PGJ)
  • iShares MSCI Malaysia (EWM)
  • iPath MSCI India ETN (INP)
  • Market Vectors Russia (RSX)
  • iShares MSCI South Africa (EZA)
  • iShares MSCI Brazil (EWZ)

International Sectors …

You can also get sector-focused global and international ETFs. This is one of the largest groups of international funds with more than 65 ETFs.

IPW holds stocks in non-U.S. energy companies, including the BP Group.
IPW holds stocks in non-U.S. energy companies, including the BP Group.

One example is the SPDR S&P International Energy (IPW). Instead of being dominated by the American multinational oil giants like many energy sector funds, IPW gives you access to non-U.S. companies like BP Group, Royal Dutch Shell, Encana, and Suncor.

Specialty International Funds …

When most people think of ETFs, they think of stock funds. However, there are now more and more bond ETFs being introduced. In fact, there are already seven international bond ETFs, such as the SPDR Barclays International Treasury Bond ETF (BWX).

Currency ETFs provide yet another way to invest outside the borders of the U.S. There are more than 30 of them, and I covered this topic in my June 18 Money and Markets column.

Next, let’s take a quick look at one more category of ETFs: Those that follow certain investment themes combined with a geographic specialty. A good example is the Claymore/AlphaShares China Small Cap (HAO). In addition to investing exclusively in China, HAO concentrates even more and gives you a portfolio of fast-growing Chinese small-caps.

Last but not least, we’re starting to see more leveraged and inverse international ETFs. Look for the selection of these to grow, but use them with caution. See my June 25 Money and Markets column to learn more.

As you can tell, the world of ETFs is a lot bigger than you might think. And you can use it to expand your horizons and scour the globe for profits!

Best wishes,

Ron

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules