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3 Foreign ETFs Rising Despite Market Volatility - ETF News And Commentary

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After a period of calm, nervousness is back in Wall Street with some investors wondering whether the recent sell-off is just a beginning of a broader stock market correction.

Investors who were celebrating record highs just three weeks before are now seeing some of the wildest price swings in the markets since the fall of 2011 (read: 3 Attractive Value ETFs to Buy After Market Selloff ).

Just as U.S. investors were starting to feel good about their recovering economy and the improving U.S. corporate health supported by a falling unemployment rate, fears of a global growth slowdown has dampened their enthusiasm.

Both the International Monetary Fund (IMF) and the Fed officials have recently expressed their concerns about the global economy with the possibility of a recession in Europe having the most detrimental effect on the markets.

Apart from this, slowing growth in China along with other major emerging markets, sluggish growth in Japan and tumbling energy prices and rising geopolitical risks including widening Ebola fears have all added to the market volatility.

Moreover, with the Federal Reserve on track to end its bond-buying stimulus later this month, investors have been cutting their exposure on risky assets and increasing their positions in the so-called safe haven assets.

These factors led the Dow Jones Industrial Average on a losing spree for the past few days, which has closed in the red in roughly 9 out of 11 trading sessions. In fact, both the Dow and the S&P 500 have recently seen their worst three-day slide since 2011 .

Rising volatility and related fear was clearly witnessed in the sharp spike in the Wall Street fear gauge indicator - the CBOE Volatility Index recently jumped to the highest level in 28 months (read: 3 Low Risk Equity ETFs for An Uncertain Market ).

However, the rising market volatility notwithstanding, some pockets of the foreign equity markets are still shining and are delivering positive returns despite the slump.

Below we have highlighted three foreign ETFs that are gaining despite the recent stock market gyrations back in the U.S:

Brazil - iShares MSCI Brazil Capped ETF ( EWZ )

Brazil ETFs have been surging after the recently held first round of general election in which the current president, Dilma Rousseff, did win, but failed to garner enough support to avoid a run-off vote against the second place candidate (read: Brazil ETFs Surge After First Round Election; What's Next? ).

In fact, the momentum in Brazil ETFs is continuing after Marina Silva, the pro-market leader who finished third in Brazil's Oct. 5 first-round election, endorsed Aecio Neves (who stood second) over President Dilma Rousseff. Neves is also considered to be a pro-growth presidential candidate and the support from Silva has brightened his chances of beating the unpopular Rousseff.

The fund is the most popular ETF in the Brazilian equity space with an asset base of more than $5 billion and average trading volume of 24.4 million shares. EWZ holds a basket of 75 stocks and is quite concentrated in its top five holdings.

Sector-wise, Financials dominate the fund with 31.2% exposure, followed by Consumer Staples and Energy with 16.4% and 14.6% allocations, respectively. The fund charges 61 basis points as fees and has surged more than 2.5% in the past one week.

China- Global X China Industrials ETF ( CHII )

The recent Chinese trade data have brought some relief to China equity ETFs which have also been one of the top gainers. China's exports and imports grew more strongly than expected in September allaying fears of a deeper slowdown within the country.

The fund is quite unpopular and illiquid with as asset base of $10 million and average trading volume of less than 5,000 shares a day. The fund holds a basket of 42 stocks to track the performance of the industrial sector in China.

The product charges 65 basis points as expenses and has returned more than 3% in the past one week.

iShares MSCI Emerging Markets Value ETF ( EVAL )

Given the rising market volatility, investors were seen flocking to this emerging market value ETF. The fund tracks the MSCI Emerging Markets Value Index to provide exposure to emerging market equities that exhibit value characteristics.

The fund holds a diversified basket of 461 stocks with none of the stocks having more than a 3.8% exposure in the fund. From a sector look, Financials, Energy and Materials take the top three spots with more than 55% of exposure (read: Emerging Market at 3-year High: 3 ETFs Worth A Look ).

Country-wise, China takes the top spot with roughly 20% exposure, followed by Korea, Taiwan and Brazil. The fund charges 68 basis points as fees and has also surged more than 3% in the past one week.

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GLBL-X CHIN IND (CHII): ETF Research Reports

ISHARS-M EM VIF (EVAL): ETF Research Reports

ISHARS-BRAZIL (EWZ): ETF Research Reports

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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