Global corporations Sinopec, Vitol, Total and Glencore each earn
at least $200 billion in annual sales -- but you've probably never
heard of them.
It's the lack of familiarity with the world's top global
companies that keeps many of us frominvesting in foreign markets.
But in the past decade, the rules of the game have changed -- for
the better. Rather than trying to figure which foreign companies
should be in a well-rounded portfolio, many investors are seeking a
new class of exchange-tradedfunds (
) that provides all of the international exposure you'll ever
They're called "single-country funds" or "country-specific
ETFs." For example, if you think top Japanese companieswill benefit
from rising trade with China, then you might want to check out the
iShares MSCI JapanIndex (
. ThisETF owns big stakes in
, Softbank (the country's leading internet provider) and Takeda
Pharmaceuticals, one of the world's largest drug makers -- among
You can now choose from dozens of ETF options, and some of the
ETF providers provide country-specific exposure with unique twists.
For example, Wisdom Tree's ETF strategists are big fans of
dividend-payingstocks , so theyoffer ETFs such as the
Wisdom Tree AustraliaDividend Fund (
Japan Small Cap Dividend Fund (DFJ)
Wisdom Tree Middle East Dividend Fund (GULF)
. Wisdom Tree also offers ETFs that focus on foreignbonds ,
currencies and even specific global industries such asreal estate
and electric utilities.
You can read more about Wisdom Tree's offerings by
In addition to Wisdom Tree, three other ETF providers offer the
bulk of countryfund offerings: Barclays (the sponsor of the
top-selling iShares funds), Global X and Market Vectors. Let's take
a closer look.
This family of funds is the most extensive, with a specific ETF
geared toward more than 30 countries. In fact, if you are looking
to target specific countries such as Turkey, Belgium or Malaysia,
these funds are your only direct path to them. Many of these funds
have been around for more than a decade and
have become quite popular
The ETF strategists at Global X likely realized the iShares
platform already covered manybases , so they've constructed ETFs
that take a slight detour from the traditional country-fund ETF
approach. For example, the
Global X FTSE Nordic Region ETF (GXF)
provides exposure across Scandinavia, while the
Global X Andean 40 ETF (AND)
focused on the largest companies among the Andean nations of South
Global X also offers a handful of China-focused ETFs, with each
one geared toward a specificinvestment theme such as consumer
stocks, financial stocks, etc.
, the sponsor of Market Vectors ETFs, offers a half-dozen funds
focused on specific countries such as Poland, Russia, Egypt and
Colombia, there are also a smattering of regional thematic ETFs,
Africa Index ETF (AFK)
Gulf States Index ETF (MES)
Latin America Small-Cap Index (LATM)
When these funds catch on with investors, they can really take
Market Vectors Vietnam ETF (VNM)
, for example, surged nearly 50% from December 2012 to February
2013 as that country'seconomy appears to be building a head of
Action to Take -->
Yet during the long haul, many of these countries are likely to
keep boosting their economies at a fast pace. Indeed, theIMF
expects global economic growth outside the United States and
Western Europe to approach 6% in 2013. And many economists expect
that trend to continue -- unless our economy, which accounts for
25% of globalGDP , hits another rough patch.
Disclosure: Wisdom Tree's founder, Jono Steinberg, is a
former superior of David Sterman.
This article originally appeared on InvestingAnswers.com:
Profit From International Investing -- Here's How
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